H. Shankar, Managing Director, CPCL
| Photograph Credit score:
BIJOY GHOSH
With capability utilisation usually exceeding 110 per cent, Chennai Petroleum Company Ltd (CPCL), a standalone refiner a part of Indian Oil Company, is exploring capability enlargement of its Manali plant in North Chennai. From the present ranges of 10.5 million tonne (MT) the corporate is eyeing 14 MT.
Within the first quarter the corporate reported a 114 per cent capability utilisation.
“We now have initiated inside research to develop our refining capability. If we’re to maintain 115 per cent capability utilisation year-round, we might want to spend money on {hardware}, tankage and infrastructure. The feasibility examine was launched final month, and we may have a clearer image on points like spending on the mission in a few months,” H Shankar, Managing Director, CPCL, advised businessline.
Offering an replace on the upcoming refinery mission at Nagapattinam in Tamil Nadu, the administration not too long ago stated CPCL has accomplished the acquisition of over 1,200 acres of land and pre-project work is underway. “The federal government felt that we must always do a re-working of the price given the time lag and we’ve accomplished that,” stated Shankar.
The deliberate 9 million tonnes every year (mtpa) facility earlier had a petrochemical depth index of 6 per cent and the corporate is now transforming configurations of the mission. As soon as that is accomplished, it should search obligatory approvals from the Ministry, he added.
The refinery enlargement, a three way partnership between CPCL and Indian Oil Company (IOC), has had its capital value revised to ₹36,400 crore, with IOC holding a 75 per cent stake and CPCL 25 per cent.
On retail foray, Shankar stated a significant a part of CPCL’s technique to scale back vulnerability is its entry into retail gasoline advertising and marketing. The corporate plans to arrange a number of stores throughout this Diamond Jubilee yr, aiming to mitigate the ₹400–500 crore annual loss from Central Gross sales Tax (CST) under-recoveries — a burden confronted as a consequence of lack of a distribution community.
“Final yr, in Q1 alone, we had a CST under-recovery of ₹129 crore, and this yr it’s about ₹123 crore in Q1 of this fiscal. Retailing our personal gasoline inside Tamil Nadu will assist reduce this recurring loss. We’ll quickly float tenders for establishing the shops and transfer swiftly, aligning this initiative with our Sixtieth-year milestones,” he added.
CPCL reported a internet lack of ₹40 crore in Q1 FY25, in comparison with a internet revenue of ₹357 crore within the corresponding interval final yr. “Monetary efficiency was underneath pressure as a consequence of broad fluctuations in crude oil costs and decline in gross sales Nevertheless, we did properly on numerous bodily parameters. We achieved a distillate yield of round 80 per cent, which was one of the best within the final 5 years. Even our gasoline and loss metric – the portion of crude oil that doesn’t get transformed into saleable merchandise that instantly displays vitality effectivity – got here all the way down to 7.75 per cent, the bottom ever for CPCL.”
Crude costs dropped by $15 to $17 per barrel this quarter in comparison with the identical interval final yr. “Though the product cracks (particularly diesel and petrol) remained regular or improved barely, we couldn’t hedge this worth volatility as a standalone refinery and not using a advertising and marketing arm,” he stated.
Regardless of the loss within the first quarter, Shankar stated that the core working profitability had improved, with gross refining margins (GRM) – representing the revenue a refinery makes for every barrel of crude oil processed – larger by ₹60 crore over the earlier yr. On a per-barrel foundation too, GRMs remained regular or barely larger in comparison with Q1 FY24.
On his outlook for the second quarter, Shankar stated, “We’re cautiously optimistic. Crude costs have stabilised and operational efficiency stays sturdy. We’re assured of a greater Q2 than final yr, though a deliberate shutdown is scheduled within the later a part of the quarter. July efficiency has already proven an uptick over Q1,” he stated.
CPCL’s refinery has been working at wholesome capability utilisation up to now. In FY2024, the corporate achieved its highest ever crude throughput of 11.6 MT (11.3MT in FY2023) towards a nameplate capability of 10.5 MTPA.
Printed on July 28, 2025