Date:18/11/2005 URL: http://www.thehindubusinessline.com/2005/11/18/stories/2005111802110200.htm

Back Falling crude prices hit MRPL refining margin

Pratim Ranjan Bose

Kolkata , Nov. 17

THE falling trend in crude prices has left an impact on the refining margin of Mangalore Refinery and Petrochemicals Ltd (MRPL).

Company sources said the `crack margin' defined by the difference between the product price and the crude price had been "slightly" reduced in the face of a drastic fall in crude prices the last few weeks.

The sources, however, said that, being a standalone refinery, the company was insulated from any major impact on profitability due to changes in crude prices.

This is in sharp contrast to the oil marketing companies (OMCs). Since the prices of major petroleum products such as petrol and diesel are still controlled by the Government, OMCs suffered while crude prices were spiralling. Similarly, the companies gain in a falling crude price regime.

"We (MRPL) are definitely under some pressure but the end result will largely depend on the price discounts to the oil marketing companies," an MRPL official said.

The company had registered a marginal dip in net profit from Rs 169 crore to Rs 166 crore during the second quarter due to the Rs 87-crore subsidy burden shared by it.

MRPL had already proposed a foray into retailing and was granted licences for 500 outlets. The company is likely to roll out its retail outlets in Karnataka this year.

MRPL has registered a 266-per cent growth in direct sales turnover to Rs 187 crore during the second quarter.

The MRPL scrip today closed at Rs 48.95, 0.10 per cent lower from the previous closure at Rs. 48.95, at the NSE.