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State-owned <keyword id="20039950" type="General" weightage="20" keywordseo="Bharat-Petroleum-Corporation" source="keywords" meta.keywordsubtype="org" meta.entityname="Bharat Petroleum Corporation" meta.hostid="153" meta.entityid="Bharat Petroleum Corporation">Bharat Petroleum Corporation</keyword> plans to invest Rs 1.7 lakh crore over the next five years to grow its core oil refining and fuel marketing business as well as in 'future big bets' of <keyword id="20115883" type="General" weightage="20" keywordseo="petrochemicals" source="keywords">petrochemicals</keyword> and <keyword id="19895435" type="General" weightage="20" keywordseo="green-energy" source="keywords">green energy</keyword>, its chairman G Krishnakumar has said. At present, Bharat Petroleum Corporation Ltd (<keyword id="19908646" type="General" weightage="100" keywordseo="BPCL" source="keywords" meta.keywordsubtype="org" meta.entityname="BPCL" meta.hostid="153" meta.entityid="BPCL">BPCL</keyword>) owns about 14 per cent of India's oil <keyword id="20064251" type="General" weightage="20" keywordseo="refining-capacity" source="keywords">refining capacity</keyword> and about a quarter of the fuel retailing network. It plans to grow these businesses while foraying into newer areas. The firm is now implementing the first phase of a multi-decade aspirational journey in the form of '<keyword id="22826627" type="General" weightage="20" keywordseo="project-Aspire" source="keywords">Project Aspire</keyword>' - its five-year strategic framework that is based on two fundamental pillars - 'Nurturing the Core' and 'Investing in Future Big Bets', he said in the company's latest annual report. "Our mid-term strategy is on a continuum. While we remain committed to growing our core businesses, which include refining and marketing <keyword id="20037698" type="General" weightage="20" keywordseo="petroleum-products" source="keywords">petroleum products</keyword> and upstream, we are equally focused on our big bets comprising petrochemicals, gas, green energy, non-fuel retail, and digital. "Project Aspire, with a planned capex outlay of around Rs 1.70 lakh crore over five years, will enable us to create long-term value for our stakeholders while preserving our planet for future generations," he said. "A cornerstone of our long-term strategy, Project Aspire, with a Rs 1.70 trillion investment, marks the initial phase of our multi-decade odyssey to shape the energy of tomorrow. This, coupled with our robust balance sheet, fuels our ambition to lead the <keyword id="19951336" type="General" weightage="20" keywordseo="energy-transition" source="keywords">energy transition</keyword>." The company is targeting net zero carbon emissions from its operations by 2040. "BPCL has drawn a net-zero roadmap, which encompasses renewable power, green hydrogen, compressed biogas, carbon capture, utilisation, and storage (CCUS), efficiency improvement and the offsets procurements. This would require a phased capital outlay of approximately Rs 1 lakh crore till 2040, and the company is geared for the same," he said. The firm's bet on continuing investing in core businesses is based on the premise that India's booming economy will drive a 4-5 per cent annual increase in energy demand and petroleum product consumption. Also, the demand for major petrochemical products is expected to rise by 7-8 per cent annually. "This presents a strategic opportunity to expand refining capacity alongside the development of integrated petrochemical complexes," he said. BPCL is implementing new petrochemical projects at two of its three oil refineries. A Rs 49,000 crore ethylene cracker project is being implemented at the Bina refinery in Madhya Pradesh, alongside raising oil refining capacity from the current 7.8 million tonnes to 11 million tonnes annually by 2029. A polypropylene project is being set up at Kochi refinery in Kerala by 2027. "To meet the anticipated demand beyond our planned expansions in Bina and Kochi, we are actively evaluating options for setting up additional integrated refining and petrochemical capacities within the next 5-7 years," Krishnakumar said without disclosing either the investments or the location of such a project. Andhra Pradesh is being speculated as the likely site after Prime Minister Narendra Modi's BJP and regional party TDP stormed to power in the state in recently concluded assembly elections. TDP has been demanding the implementation of a refinery-cum-petrochemical complex that was promised as part of the package when the state was split more than a decade back. "Our investment in the petrochemical project is consistent with our aspiration of becoming a dominant player in India's petrochemical growth story," Krishnakumar said. On energy transition, he said BPCL is targeting to build 2 gigawatts (GW) of <keyword id="19895602" type="General" weightage="20" keywordseo="renewable-energy" source="keywords">renewable energy</keyword> capacity by 2025 and 10 GW by 2035. "We are investing nearly Rs 1,000 crore to establish two 50 MW captive wind power plants in Maharashtra and Madhya Pradesh, which will support our refineries in Mumbai and Bina." The firm is also investing around Rs 300 crore in 72 MWp of solar project in Prayagraj, Uttar Pradesh. "Concomitantly, we are executing green hydrogen projects aligned with the National Green Hydrogen Mission. These projects include a 5 MW electrolyser plant at Bina refinery and a green hydrogen refuelling station with an indigenously developed electrolyser at Kochi," he noted. BPCL, he said, is committed to supporting the transition to electric mobility through a robust and accessible charging infrastructure. The company has installed over 3,000 charging stations, including fast chargers for cars and two-wheelers. 900 fast chargers are installed across 120 highway corridors, which helps address the range, discovery and time anxiety of electric vehicle (EV) owners. "Over the next five years, we aim to install 4-wheeler fast chargers at approximately 6,000 retail outlets across 400 highway corridors, prioritising high-traffic corridors like the Golden Quadrilateral and N-S/E-W highways," he said. On biofuels, he said BPCL sells petrol with 20 per cent ethanol blend at 4,279 out of its over 22,000 petrol pumps. It is also building compressed biogas plants using municipal solid waste to make gas that can be used as CNG in automobiles. The firm is also exploring partnerships in the arena. "These combined efforts, along with the upcoming commissioning of a bio-ethanol refinery, positions BPCL as a key player in India's transition to a greener fuel mix, creating a robust ecosystem for the adoption of cleaner fuels across the country," he added. BPCL is establishing a corporate venture capital fund to invest directly in promising startups. "In order to thrive in this complex and challenging business landscape, we will leverage our agility and focus on operational excellence to ensure continued success. Safety and reliability will remain our top priorities, guiding all our actions. We are committed to upholding the highest standards of corporate governance," he added. He said the energy sector of India stands at an inflection point. "The nation has an ambitious vision of becoming a USD 30 trillion developed economy by 2047. 'Viksit Bharat @2047' will necessitate an almost fourfold increase in primary energy demand." India's exponential growth trajectory will propel it to a pivotal role in the global energy market, accounting for roughly 12 per cent of world energy consumption by 2047. "The key strategic objectives for India in the energy sector will entail significant expansion in refining capacities, raising the share of gas in the energy basket from about 6 per cent to 15 per cent, establishing leadership in petrochemical exports, and sharply reducing energy imports from current levels of 47 per cent to below 25 per cent by 2030 and to zero by 2047," he said. India is targeting 500 GW of non-fossil fuel energy capacity, sourcing half of its energy needs from renewables, reducing carbon emissions by 1 billion tonnes and lowering carbon intensity by 45 per cent by 2030 with the ultimate goal of net-zero emissions by 2070. "Building on its strong Indian energy presence, BPCL aspires to meet 7-10 per cent of the nation's primary energy demand by 2047," he said.

BPCL planning Rs 1.7 lakh crore spend to expand core business, new energy foray over next five years

After reporting <keyword id="21767878" type="General" weightage="20" keywordseo="record-profits" source="keywords">record profits</keyword>, state-owned <keyword id="20459282" type="General" weightage="100" keywordseo="fuel-retailers" source="keywords">fuel retailers</keyword> <keyword id="19908045" type="General" weightage="20" keywordseo="Indian-Oil-Corporation" source="keywords" meta.keywordsubtype="org" meta.entityname="Indian Oil Corporation" meta.hostid="153" meta.entityid="Indian Oil Corporation">Indian Oil Corporation</keyword> (<keyword id="6354733" type="General" weightage="20" keywordseo="IOC" source="Orion">IOC</keyword>), <keyword id="19908646" type="General" weightage="20" keywordseo="BPCL" source="keywords" meta.keywordsubtype="org" meta.entityname="BPCL" meta.hostid="153" meta.entityid="BPCL">BPCL</keyword> and <keyword id="20052221" type="General" weightage="20" keywordseo="HPCL" source="keywords" meta.keywordsubtype="org" meta.entityname="HPCL" meta.hostid="153" meta.entityid="HPCL">HPCL</keyword> posted up to 90 per cent slump in their June quarter earnings as margins fell and they booked under-recovery on the sale of domestic cooking gas LPG at government-controlled rates. IOC, the nation's largest oil firm, reported 81 per cent drop in standalone net profit in April-June - the first quarter of current 2024-25 fiscal year - to Rs 2,643.18 crore as opposed to a profit of Rs 13,750.44 crore a year back, according to a company filing. Net profit also declined sequentially, when compared to an earning of Rs 11,570.82 crore in March quarter. Hindustan Petroleum Corporation Ltd (HPCL) posted 90 per cent drop in profit to Rs 633.94 crore as compared to an earning of Rs 6,765.50 crore in April-June 2023 and Rs 2,709.31 crore in the preceding March quarter. Bharat Petroleum Corporation Ltd (BPCL) net profit dropped to Rs 2,841.55 crore in April-June from Rs 10,644.30 crore a year back and Rs 4,789.57 crore in January-March, its filing showed. The three fuel retailers made extraordinary gains from holding petrol and diesel prices despite a drop in cost. The price freeze was justified in the name of recovering losses they had suffered in the previous year when they did not raise retail prices despite a surge in cost. The gains arising from the price freeze were eroded with petrol and diesel prices being cut by Rs 2 per litre each just before general elections and a fall in refining margins. Also, the three had uncompensated <keyword id="20866844" type="General" weightage="20" keywordseo="LPG-subsidy" source="keywords">LPG subsidy</keyword> - IOC booking under-recovery of Rs 5,156.23 crore in April-June, BPCL Rs 2,015.10 crore and HPCL Rs 2,443.71 crore, according to the filings. As per an order of the oil ministry, when market determined price (MDP) of LPG cylinders is less than its effective cost to customer (ECC), oil marketing companies (OMCs) have to retain the difference in a separate buffer account for future adjustment. However, as on June 30, 2024, the three firms had a net negative buffer as the retail selling price was less than MDP. The three retailers IOC, BPCL and HPCL had reported record profits totalling about Rs 81,000 crore in FY24 (2023-24), which was far more than their annual earnings of Rs 39,356 crore in pre-oil crisis years. This is because they resisted calls to revert to daily price revision and pass on softening in rates to consumers on grounds that prices continue to be extremely volatile - rising on one day and falling on the other - and that they needed to recoup losses incurred in the year, when they kept rates lower than cost. IOC in 2023-24 posted a standalone net profit of Rs 39,618.84 crore compared to Rs 8,241.82 crore in 2022-23. While the company could argue that FY23 was impacted by the <keyword id="21626914" type="General" weightage="20" keywordseo="oil-crisis" source="keywords">oil crisis</keyword>, the FY24 earnings are higher than even the pre-crisis years - Rs 24,184 crore net profit in 2021-22 and Rs 21,836 crore in 2020-21. BPCL posted a net profit of Rs 26,673.50 crore in FY24, higher than Rs 1,870.10 crore earnings in 2022-23 and Rs 8,788.73 crore in FY22. HPCL's 2023-24 profit of Rs 14,693.83 crore is compared with a Rs 8,974.03 crore loss in FY23 and a profit of Rs 6,382.63 crore in 2021-22, according to the filings. The losses in FY23 had led to the finance minister announcing Rs 30,000 crore equity infusion in the three firms. Mid-way through the year, that support was halved to Rs 15,000 crore. The support was to happen by way of equity infusion via a rights issue. But after the record profits of 2023-24, the equity infusion plan has now been scrapped. Finance Minister Nirmala Sitharaman had on February 1 last year, while presenting the annual Budget for the 2023-24 fiscal (April 2023 to March 2024), announced an equity infusion of Rs 30,000 crore in IOC, BPCL and HPCL to support the three state-owned firm's energy transition plans. In the interim budget that the finance minister presented in February this year ahead of the general elections, the capital support to the three oil companies was halved to Rs 15,000 crore. In the full budget for 2024-25, both plans have been scrapped. While other state-owned oil companies like Oil and Natural Gas Corporation (ONGC) and GAIL (India) Ltd too have lined up billions of dollars of investment to achieve net-zero carbon emissions, the equity support was limited to the three fuel retailers, which had suffered huge losses in 2022 when they held retail petrol, diesel and cooking gas (LPG) prices despite a spike in raw material (crude oil) prices, following Russia's invasion of Ukraine. The board of IOC and BPCL had last year approved rights issues to raise to Rs 22,000 crore and Rs 18,000 crore, respectively. The government was to participate in the rights issue. The three companies, which control roughly 90 per cent of India's fuel market, 'voluntarily' have not changed petrol, diesel and cooking gas (LPG) prices, resulting in losses when input costs were higher and profits when raw material prices were lower. They posted a combined net loss of Rs 21,201.18 crore during April-September 2022 despite accounting for Rs 22,000 crore announced but not paid LPG subsidy for the previous two years. Subsequent softening of international prices and government giving out LPG subsidies helped IOC and BPCL post annualised profit for 2022-23, but HPCL was in the red. In FY24, things changed dramatically, and the three firms posted record earnings.

After record profits, state-owned fuel retailers Indian Oil, BPCL and HPCL see profit slump in Q1

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BPCL planning Rs 1.7 lakh crore spend to expand core business, new energy foray over next five years

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After record profits, state-owned fuel retailers Indian Oil, BPCL and HPCL see profit slump in Q1

PTI

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