Special Correspondent

Suffers huge inventory loss in 2008-09

Gross refining margin is $5.32 a barrel

NEW DELHI: Mangalore Refinery and Petrochemicals Ltd (MRPL), a subsidiary Oil and Natural Gas Corporation (ONGC), on Wednesday announced a 6.3 per cent drop in profit during 2008-09 at Rs. 1,192.54 crore, down from Rs. 1,272.23 crore in the previous fiscal.

Addressing a joint press conference along with ONGC Chairman and Managing Director, R. S. Sharma, MRPL Managing Director, Uttam Kumar Basu, said during the year the company had suffered a huge inventory loss. But it had already bottomed out. “We do not anticipate a further inventory loss this fiscal”. However, the company reported better performance in the fourth quarter of last fiscal as compared to the year before. The January-March quarter profit stood at Rs. 607.62 crore, up from Rs. 225.33 crore in the fourth quarter of 2007-08.

MRPL has posted a 16.9 per cent growth in net turnover at Rs. 38,284.42 crore against Rs. 32,735.72 crore in 2007-08.

The gross refining margin of the company was $5.32 a barrel. “Domestic demand is bullish and everything we are producing is getting absorbed,” he added.

Mr. Sharma said MRPL was close to striking a deal to buy crude oil from prolific Rajasthan fields after operator Ca India had agreed to give discounts on waxy crude.

MRPL will buy two lakh tonnes of crude from Cairn in 2009-10 and four lakh tonnes next fiscal. Mr. Sharma said ship transportation from Kandla port in Gujarat to Mangalore in Karnataka would have to be addressed.

Indian Oil Corporation has reached pricing agreement with Cairn to buy 1.9 million tonnes at a discount of about 11 per cent to current Nigerian Bonny Light crude oil price. Cairn wants to price the crude taking three-year average of Bonny Light which comes to $75 a barrel while current rates were about $20 lower. The discount, as per the pricing formula at $75, works out to about 16 per cent.