Venezuelan crude may present opportunities despite challenges, says HPCL

Venezuelan crude may present opportunities despite challenges, says HPCL

• HPCL sees opportunity in processing Venezuelan crude
• LPG sales under-recoveries rose to Rs 503 crore in Q3, may reach Rs 120/cylinder going ahead.
• HPCL's Q3 net profit jumped 57.7% to Rs 4,011.4 crore on better refining margins

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State-run Hindustan Petroleum Corporation on Thursday said that re-emergence of Venezuelan crude to the market is creating evaluation opportunities, noting that while the heavy grade is challenging to process, the company has assets that provide flexibility to assess such barrels.

“The good part is that if Venezuelan crude is coming out right now, then having the Barmer refinery which has delayed coker units, at least gives us an opportunity to evaluate and see. It's not an easy crude to handle. The fact that we have that asset gives us an opportunity,” the company said on its Q3FY26 earnings call.

The recent US ouster of Venezuelan president Nicolas Maduro has sparked discussions about a potential stabilisation of the Venezuelan oil sector, which holds the largest reserves, a move that could benefit India in the medium- to long-term, as per analysts.

The move could allow limited volumes of Venezuela’s heavy crude to re-enter India’s import mix, primarily benefiting complex refineries.

“Venezuelan crude apart from being bottoms-heavy, also has high viscosity. So we will have some opportunities. We will evaluate as and when it offers and we will take it accordingly,” HPCL said.

Venezuelan heavy and extra-heavy grades are not universally suitable across Indian refineries. However, limited volumes have been processed intermittently at HPCL-Mittal Energy Ltd, as per Kpler.

HPCL further noted that the company’s under recoveries made on the sale of cooking fuel or LPG (liquified petroleum gas) has increased due to a rise in the prices of Saudi CP , the international benchmark for LPG pricing.

During the third quarter of the current fiscal, the state-run oil marketing company incurred an under recovery of Rs 503 crores. In January, the under recoveries stood at Rs 95 per cylinder. The company now expects this to increase to Rs 120 per cylinder going ahead.

The company expects to incur Rs 13,000-14,000 crore as capex in the ongoing fiscal 2025-26, slightly lower than the budgeted Rs 15,000 crore. For the upcoming fiscal 2026-27, the company expects capex to be on the similar lines.

“In terms of the nature of investment, going forward you can expect wider spread including marketing, expense, some new energy capital in the next five years,” the company said.

The company reported a 57.7% jump in its consolidated net profit during the third quarter of fiscal 2025-26 at Rs 4,011.4 crore against Rs 2,543.65 crore in the same period of last fiscal owing to improved gross refining margins (GRMs) and compensation for liquefied petroleum gas (LPG) losses.