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Declining crude augurs well: Behuria

Sarthak Behuria

CHENNAI: As global crude oil prices decline, refining margins that provide national oil companies such as Indian Oil Corporation some respite in the face of mounting under-recoveries on sales of petrol, diesel, kerosene and liquefied petroleum gas also drop, IOC Chairman Sarthak Behuria said here on Monday.

The decline in the crude prices augurs well for the country, particularly for the three oil marketing companies — IOC, BPCL and HPCL — whose under-recoveries in the first five months of the current fiscal soared to Rs. 90,000 crore. The country, he added, would be able to manage better with the current crude prices between $100 and $110 a barrel than the $145 witnessed sometime ago. While noting that crude prices were likely to stabilise in the medium term, Mr. Behuria said there, however, was no possibility of a reduction in consumer prices of the four products.

The companies continue to sell the products at prices less than the rate at which refineries supply them. Mr. Behuria, who is also the Chairman of Chennai Petroleum Corporation (CPCL), said this during an interaction with presspersons at CPCL’s 42nd annual general meeting.

In his speech at the annual meeting of CPCL, he said in 2007-08 the corporation achieved a gross refining margin of $8.47 a barrel, net of under-recoveries, as against $5 in the previous fiscal. CPCL Managing Director K. K. Acharya later told presspersons that the refinery was able to achieve a margin of $15 in the first three months of the current fiscal.

The corporation has declared a final dividend of 120 per cent for 2007-08. Earlier in the year, it had distributed an interim dividend of 50 per cent. The turnover of the company for the year was Rs. 32,889 crore as against Rs. 29,349 crore in 2006-07. The profit after tax went up from Rs. 565 crore to Rs. 1,123 crore.

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