Refining performance was slightly weaker. Where is the trajectory headed in terms of core GRMs versus the reported ones?
This year, our reported GRMs were $7.15 versus $5.86 last time. So, there was gain in the GRMs which was result of two things –. a better throughput as well as inventory gains to the extent of $3.43 in this quarter in the normal method of calculation. A part of this inventory gains was offset by the lower rate on some of the products including LPG and bitumen. If there is an increase in the crude prices, the fuel which we consume in the refinery will also be priced in. And that will also have an impact.
What is your take on the marketing margins?
Marketing volumes had been good. We have recorded a growth of around 5% on the products if we put together all the products which we market. We had sales of around 9.63 million metric tonne which is highest Q1 sales which we had done.
How much was the inventory gain this quarter?
You can say that Rs 1,900 crore inventory gains, Rs 1,700 crore profit, but GRMs are lower. There is a higher exchange rate. Last year, the exchange rate was in the range of 64.8 but this year, it is over 68. Also, there was a variation of exchange rate during the quarter itself. The exchange rate during the quarter moved from 65.18 to 68.47. In the Q1 of last year, the variation range was between 64.59 and 64.86. That certainly affects profitability as crude prices go up.
You have guided for Rs 8400 crore capex this year. How will that boost business?
Our major capex is towards refinery expansions and pipeline projects. In overall kitty, we got both the refineries going for expansion with bottom upgradation and Euro VI quality fuels. Bottom upgradation will improve the distilled yields and it will add substantial GRM to both the refineries for the total throughput of the refineries.
At one end. our capacity from Vizag is increasing from 8.33 to 15, in Mumbai from 7.5 to 9.5 but the GRMs will improve substantially on both the refineries for the full throughput. Whilst these two projects are commissioned, you should see substantial jump in our GRMs.
What about your volumes in petrol and diesel? They have been quite healthy. Would you able to maintain this kind of growth going forward too?
In this quarter, the volume was around 4.5 million metric tonnes. Almost 50% is diesel. We have gained on both MS and HSD as far as volume is concerned. Last year, in the same period MS was 1.6 million metric tonnes versus 1.74 million metric tonnes this time. So far as the tonnage is concerned, we have gained. As far as growth is concerned, the industry growth for MS is the same as our growth — 6.9-6.8% versus 6.9% of ours.
HSD growth is also almost in the same range. So we are moving with the industry. We are gaining in terms of tonnages but when there are more players in the system, as far as the pie is same, there will be percentage variations. Of the overall PSU industry, when some of the market goes to private players, because of the growth in the volumes, we are also gaining, they are also gaining.
You have also participated in city gas bidding. What is the update on that?
We have bid for 21 geographical areas, based on our understanding. Let us see how the others have bid and that will decide who is the winner. We already have got certain geographical areas under our kitty from the previous rounds and we will continue to participate in city gas business.