India tries to boost HPCL’s bottom line

The Indian government has devised a subsidy-sharing formula in an attempt to salvage state-owned Hindustan Petroleum Corp. Ltd.’s (HPCL) finances. Through the plan, the government said it hopes that HPCL can post a marginal profit of around Rs2 billion (US$41.86 million) for 2008 to 2009. According to media reports, the financial health of HPCL was worse than that of the two other state-owned oil marketing companies, Indian Oil Corp. (IOC) and Bharat Petroleum Corp. Ltd. (BPCL), posting a loss in 2008-2009, even after receiving its share of oil bonds. HPCL had to buy refined products from the market in large quantities to ensure uninterrupted supply of fuels to customers during a strike by IOC and BPCL officers in 2008. The combined revenue loss of the three companies rose more than 34%, from Rs771.23 billion (US$16.14 billion) in 2007-2008, due to an unprecedented jump in global crude oil prices. (May 28, 2009)