CHENNAI: An improved performance on various fronts and a highest-ever crude throughput notwithstanding, Chennai Petroleum Corporation Limited (CPCL) saw its net profit drop in 2005-06 on account of discounts it offered to oil marketing companies as part of the Centre's subsidy sharing scheme.

Nonetheless, the group company of the Indian Oil Corporation had decided to maintain a 120 per cent dividend and pursue new projects worth several hundred crores of rupees, including capacity enhancement of its Manali refinery through de-bottlenecking. Thirty per cent of the dividend had already been paid as interim dividend.

Giving details of the 2005-06 performance at a press meet here on Monday, CPCL Managing Director K. K. Acharya said the Rs.25,409-crore turnover was the highest-ever. It was 56 per cent more than the previous year's turnover.

The higher turnover, he pointed out, was mainly due to increase in crude throughput — 10.36 million tonnes — and higher prices for the products based on import-parity. But with CPCL providing Rs. 439 crore discounts during the year to oil marketing companies to offset a part of their under-recoveries on the sale price of petrol, diesel, cooking gas and kerosene, its profit after tax dropped to Rs. 481 crore from Rs. 597 crore in the previous fiscal.

Mr. Acharya said the under-recoveries of the marketing companies were a matter of concern to CPCL too. Apart from refineries, including those in the private sector, companies engaged in exploration and production of oil and gas like ONGC and OIL were sharing the subsidy. Due to non-revision of the prices of the four products of mass consumption, the subsidy borne by the refinery worked out to about $1.3 a barrel. The gross refining margin was $5.66 for 2005-06 including the subsidy component.

He said crude processing was 16 per cent more than the previous fiscal and the capacity utilisation of crude units at its Manali refinery was 102 per cent. Even at the enhanced crude thruput, the distillate yield per centage level could be maintained by higher secondary units processing. Processing of high sulphur (heavy) crude oil during the year was 69 per cent, "which very few refineries in the country do.''

The capacity of the Manali refinery — the other facility of CPCL is near Nagapattinam — would be enhanced by 1.7 million tonnes through low cost unit revamps. The project to take the overall capacity of CPCL from 9.5 to 11.2 million tonnes would be completed by 2008. A feasibility study was being undertaken to set up resid upgradation facilities. Some of the other projects being pursued or under consideration include a 20 MW gas turbine project, a windmill power project, expansion of propylene unit and setting up of a poly propylene unit.

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