State-run Bharat Petroleum Corp Ltd (BPCL) has seen significant improvement in demand and supply scenario compared to estimates in the beginning of COVID-19 lockdown, stated one of the top executives of BPCL. While the demand for petrol has reached pre-COVID-19 levels, diesel is still behind.
Speaking to the Free Press Journal, Arun Kumar Singh, Director — Marketing and Refineries, said, “Refineries are yet to reach pre-COVID-19 level (in terms of production).”
“While the demand for petrol has improved to pre-COVID-19 level, diesel is lagging behind.” He added the improvement in petrol is mainly because there has been an increase in use of personal mobility vehicles whereas diesel-consuming vehicles (like buses and trucks) movement is limited. However, the LPG demand has grown beyond pre-COVID-19 levels, stressed Singh. “LPG is growing at 4-5 per cent industry standards.”
Commenting on the demand-supply estimates beginning of the Q1 FY 2020-2021 versus the present demand-supply scenarios, Singh said, “There has been a significant improvement. We are ready for all situations. If there are no major disruptions, we will soon see a significant improvement further.”
The performance of the first quarter of the year 2020-21 was adversely impacted due to pandemic-induced lockdowns, leading to supply chain disruptions and curtailment of activity across industries. “For BPCL, while refining margins suffered due to inventory losses and lower international product cracks, the marketing margins remained robust, leading to a better overall performance,” stated BPCL chairman, K Padmakar. BPCL registered profit after tax of Rs 2,076 crore in this quarter as against Rs. 1,075 crores registered in the same quarter last year.
Despite the pandemic, the company has been able to prepare itself for the disinvestment process as and when the government finds it feasible, revealed Padmakar.
In terms of cash flow, Vijayagopal, Director Finance, BPCL stated, the company is better equipped and will not be looking at raising any more funds. To meet its cash flow requirement, the company had borrowed Rs 41,875 crore. Now the debt has come down to Rs 28,000 crore which is a decent level, stated Vijayagopal.
He said the company is going ahead with its CAPEX of Rs 8,000 crore and of that Rs 2,100 crore is already spent.