Next year, HPCL will no longer purchase fuel from other businesses

 Next year, HPCL will no longer purchase fuel from other businesses

HPCL has commissioned a 5 million tons per year facility in Chhara in Gujarat. Previously, the company had lost out on the gas bus as, in contrast to other state oil corporations, it did not participate in Petronet LNG.

It is spending Rs 73,000 crore to construct a new petrochemical complex and oil refinery in Barmer, Rajasthan, with an annual production capacity of 9 million tonnes.

After completing the expansion of its Visakhapatnam refinery in Andhra Pradesh and building a new one in Rajasthan next financial year, Hindustan Petroleum Corporation Ltd. (HPCL) will no longer purchase diesel from businesses like Reliance Industries Ltd. and Nayara Energy, according to company executives. Despite controlling about 25% of the nation's gas stations, HPCL lacks the corresponding ability to refine oil for the production of gasoline and diesel.

In order to make up for this, it purchases goods from refiners including Nayara's Vadinar refinery, Reliance Industries' Jamnagar plants in Gujarat, and Mangalore Refinery and Petrochemicals Ltd (MRPL). Despite controlling about 25% of the nation's gas stations, HPCL lacks the corresponding ability to refine oil for the production of gasoline and diesel. In order to make up for this, it purchases goods from refiners including Nayara's Vadinar refinery, Reliance Industries' Jamnagar plants in Gujarat, and Mangalore Refinery and Petrochemicals Ltd (MRPL).

In a conference call with investors after the release of the company's second-quarter earnings, HPCL Chairman Pushp Kumar Joshi said that the company's five years of capital expenditure on "strengthening quality and capacity" of assets had "started yielding results now." According to him, the business has already increased the capacity of its Mumbai refinery from 7.5 million to 9.5 million tonnes annually, and it will finish expanding its Visakhapatnam facility to 15 million tonnes the next year.

In addition, it is spending Rs 73,000 crore to construct a new petrochemical complex and oil refinery in Barmer, Rajasthan, capable of producing 9 million tons of oil annually. The firm has expanded into new markets via capacity augmentation, including petrochemicals, natural gas, and biofuels, "to provide stability to our balance sheet," he added. Joshi provided an update on the Visakhapatnam refinery expansion project, stating that the commissioning of a 3.05 million tonnes full conversion hydrocracker unit (FCHCU) would enhance the distillate output, or the amount of gasoline and diesel produced. After the residue upgradation facility (RUF) is put into service, the refinery's capacity will increase to 15 million tonnes annually from the current 13.7 million tonnes.

According to him, the Rajasthan refinery is 72% finished, and commissioning will begin gradually in the next year. When asked about the product sourcing mix, Rajneesh Narang, Director of Finance at HPCL, said that 43% of the gasoline and 47% of the diesel the business distributes are now sourced from its refineries in Visakhapatnam and Mumbai. In a joint venture with steel magnate Lakshmi Mittal, HPCL-Mittal Energy Ltd. provides 24% of gasoline and 31% of diesel. The remaining 34% of gasoline and 21% of diesel are purchased from other businesses. Following the completion of the Visakhapatnam expansion next year, he said that 61 percent of diesel would come from HPCL's own refineries, 16 percent from HMEL, and 23 percent from other sources.

All of the fuel needed will be supplied by HPCL's own and joint venture refineries when the Rajasthan refinery is operational," he said. According to him, of the gasoline produced, 49% will come from HPCL's two current refineries, 10% from HMEL, 12% from the Rajasthan refinery, and the remaining 29% from refineries like MRPL, Reliance, and Nayara. According to Joshi, HPCL has focused on three strategies over the past five years: enhancing the quality and capacity of its assets, which includes expanding the capacity of refineries and pipelines to transport fuel, especially in the south; venturing into the petrochemical industry, which will see significant growth once the Rajasthan refinery is completed; and getting into the natural gas, biofuel, and renewable energy sectors.

HPCL has commissioned a 5 million tons per year facility in Chhara in Gujarat. Previously, the company had lost out on the gas bus as, in contrast to other state oil corporations, it did not participate in Petronet LNG. Its initiative to mix ethanol with gasoline is being supported by two sugar mills it owns in Bihar. According to him, the company is already producing a 12% mix nationwide—that is, 12% ethanol and 88% gasoline. In Budaun, Uttar Pradesh, the business is constructing a compressed biogas (CBG) facility that will convert agricultural and urban waste into gas that can be used as compressed natural gas (CNG) in cars or as fuel for cooking stoves. "For green business, we want to establish a fully owned subsidiary. The subsidiary's incorporation is now at an advanced formation stage, he said. In order to meet the demand for alternative fuels, the company is also building EV charging stations and a green hydrogen manufacturing plant, he said.