HPCL to stop buying diesel from other firms next year

NEW DELHI: Hindustan Petroleum Corporation Ltd (HPCL) will stop buying diesel from companies like Reliance Industries Ltd and Nayara Energy once it completes expansion of its Visakhapatnam refinery in Andhra Pradesh and builds a new one in Rajasthan next financial year, company officials said.

HPCL owns almost a quarter of petrol pumps in the country but does not have proportional oil refining capacity to produce petrol and diesel. So to make up for this, it buys products from refiners such as Mangalore Refinery and Petrochemicals Ltd (MRPL), Reliance Industries’ Jamnagar units in Gujarat and Nayara’s Vadinar refinery. HPCL owns almost a quarter of petrol pumps in the country but does not have proportional oil refining capacity to produce petrol and diesel.

At an investor call post announcing second-quarter earnings, HPCL chairman Pushp Kumar Joshi says the firm’s focus on capital spending in the last five years in “strengthening quality and capacity” of assets has “started yielding results now”.

The company has already expanded its Mumbai refinery capacity to 9.5 million tonnes per annum from 7.5 million tonnes and would complete the expansion of Visakhapatnam unit to 15 million tonnes next year, he said.

Besides, it is building a new 9 million tonnes a year oil refinery and petrochemical complex at Barmer in Rajasthan at a cost of Rs 73,000 crore. Joshi said HPCL has been in the past five years concentrating on a three-fold strategy which includes strengthening quality and capacity of its assets which includes refinery capacity additions.