Ladies and gentlemen, good morning, and welcome to 3Q FY 'twenty one Indian Oil Corporation Limited Conference Call organized by Batliwal and Karani Securities India Private Limited. I would now like to turn the conference over to Mr. Harshaj Agarwal. Thank you, and over to you, sir.
A very good morning to all. On behalf of Bativa and Karani Securities, I welcome you all to the post result conference call with the management of Internal Corporation. It gives us great pleasure to once again host the management for this post result discussion. I would now now like to hand over the call to the management for the initial remarks. Post which, we'll open the floor for quick q and a.
Over to you, sir. Thank you, mister Harshad. We welcome you to post results conference call. From management side, we have mister Sandeep Kumar Gupta, director of finance, Indian Oil, and mister Matthew Thomas, executive director, corporate finance and treasury. Along with them, we have mister Rohit Kumar Akhrawal, general manager, corporate finance mister Prahat Humansinka, DGM Treasury and myself, Avinash, chief manager, treasury.
To begin with, director of finance will briefly touch upon the quarterly performance highlights, and then he will take the question. Now I will request Director of Finance, Indian Oil, to address the meeting.
Good morning to all of you. I take this opportunity to welcome all of you to this conference call post announcement of Q3 results. First, I will touch upon certain highlights to provide additional clarity As you are aware, I in the previous two quarters, the demand for petroleum products was witnessing month on month volatility on the back of intermittent lockdowns. However, during Q3, there was sustained rebound in demand of petroleum products.
Accordingly, refineries ran at a full capacity and the capacity utilization was close to 102% during the third quarter. As far as demand for some of the major products are concerned, the preference for personal mobility has led to higher consumption of gasoline, that is motor, spirit or petrol. During October 2020, the gasoline demand was at about 103% of last year's volume and it further improved to about 108% of last year's volume in the month of December. On the gasoil or diesel front, in the month of October 2020, sales stood at about 103% of last year's sales. However, we witnessed some moderation in gasoline demand to about 9195% in the month of November and December, respectively.
ATF continues to take the hardest hit with sales of only 53% in October in comparison to last year's volume. However, it has improved to about 61% of last year's volume in the month of December. Coming to some of the new business initiatives in Petroleum Retailing. In December 2020, Indian
Oil has
launched XP100, India's highest octane gasoline that offers better engine power and efficiency for the high end cars, reduces greenhouse gas and tailpipe emissions. I'm glad to inform that all our refineries are now producing XC100, and it is available at 26 cities of India. We will be further expanding the network. Further in December 25, KG3 trade LPG cylinder, FTL was relaunched with the new brand name Chotu. Customers can buy the Chotu cylinders either directly from the distributors or any appointed point of sales like ilanai stores, local supermarkets, retail outlets, etcetera.
You would have also read in the newspaper a couple of days back that we are also now launching aviation gas, which is used by the flying clubs, which was presently imported, but now we will be producing it at our refineries. And the emphasis of the management is now on product differentiation, either new products or existing products with higher specifications. During the calendar year 'twenty, IOC added two ninety six kilometer to its pipeline network, namely 102 kilometer Sivan Betarpur section of Patna Motiri Betarpur pipeline and 193 kilometer long Dulzapur bunker section of augmentation of Paradek, Haldiya, Dulzapur LPG pipeline project. With this, total network of engine oil pipelines is spent at 14,864 kilometers. Despite lockdown, fourteen thirty five kilometers of lowering of pipeline was achieved during the calendar year 2020.
Talking about numbers, the average price of crude Indian basket during the quarter was $44.65 per barrel. This represents an increase of 4% from the average price of the immediate preceding quarter that is Q2 FY 'twenty one. The crack spreads for gasoline and gasoil remained weak and that was the reason for lower refining margin. But as you can see, even the Singapore GRM was at $1.22 per barrel during the third quarter. However, off late, DMS cracks are now touching $3 per barrel and HSD cracks are nearing $4.5 per barrel, which is, in fact, a signal towards smart recovery in the periods to come.
In the petrochemical spread, the spreads have improved during the quarter. Spreads for polymers in this quarter at about $651 per tonne was 20% higher than the previous quarter, which was $541 per tonne and about 54% higher than the corresponding quarter of FY 'twenty, which was at $423 per tonne. In case of PTA, the spread during the quarter of $146 per tonne was about 25% higher than previous quarter, or the same was 21% lower than the corresponding quarter of FY 'twenty. With respect to MEG, the spread in the current quarter was about 23% higher than previous quarter and 69% higher than the corresponding quarter of FY 'twenty. This quarter, IOC has registered a profit after tax of INR4917 crore.
We are going through a period wherein refining margins are at unprecedented low level. However, higher marketing margins on petroleum as well as petrochemicals have helped to soften the blow of low refining margin environment. Further inventory gain of INR2630 crores has also helped in boosting profitability for this quarter. From a nine month perspective, the profit after tax is INR1355 crore as against INR 6,499 crore in the corresponding nine months of FY 'twenty. Higher inventory gains during the nine months along with increase in petchem volume as well as better margins have contributed to increase in profits in the first nine months of fiscal fiscal year.
Revenue from operations during this quarter is INR 146,599 crore against INR 115,749 crore in the preceding quarter of this year. Now let me briefly touch upon the performance of major verticals during Q3. First, refineries, the throughput during the quarter was at 17,860,000 metric tons with a capacity utilization of 101.7. The strength revolving demand of petroleum products during the third quarter has helped in achieving full capacity utilization of refineries. During Q3, distillate yield was at 79.5% and fuel and loss was at 9.1%.
IOCM refineries have registered a GRM of $2.19 per barrel during the current quarter. The normalized GRMs after chipping off inventory impacts and factoring in price lag for the quarter is $1.25 $1.24 per barrel. Our refineries have performed in line with Singapore benchmark margin, which was at $1.22 per barrel. Coming to pipelines. The capacity utilization of our pipelines was about 92.2% during this quarter as compared to 73.4% in the Q2 of FY twenty twenty one.
Resumption of economic activities post upliftment of COVID lockdown has led to increased demand for fuel and subsequently improved capacity utilization of our pipelines. Our pipelines continue to generate stable return, giving an EBITDA of about crores during this quarter, which is higher than the preceding quarter on account of higher throughput. On the marketing front, the petroleum product sale during this quarter was 21,230,000 metric ton as compared to 17,220,000 metric ton in the preceding quarter. As discussed at the beginning of the call, with near normalization of economic activities, demand for gasoline and gasoil has picked up. On a nine month basis, the petroleum product sales were lower in FY 'twenty one by about 15% only in comparison to corresponding nine months of FY 'twenty.
The marketing EBITDA for this quarter stood at INR 7,130 crore. This includes an inventory gain of about INR 1,700 crores. The petrochemicals, during this quarter, the business reported EBITDA of INR1954 crore as against INR1211 crore in the preceding quarter. Similarly, while comparing with the current nine month performance with that of corresponding period of last year, there has been an increase of about 77% in Avista. The improvement in Petchem profitability is driving by a combination of increase in production volumes along with improvement in margins.
In respect of borrowings, the borrowing level at as of December 31 was at INR72451 crore as against INR91505 crore as on September 30 and INR11645 crore as on thirty one March twenty twenty. The above includes lease obligation of INR7760 crore as on thirty one December twenty twenty, which has been classified as borrowing. The reduction in borrowings during the quarter has been partly driven by reduction in government use for LPG and kerosene. The outstanding receivables from government at the beginning of the quarter beginning of third quarter was about INR 9,100 crore, and that has come down to INR 4,300 crore at the end of the quarter. We are confident that the balance receivable will also get liquidated perhaps by the end of this year, considering the availability of sufficient budget.
The rest of the reduction is mainly attributable to reduce the working capital requirement. I I will end my briefing here, and now we will take your questions. Thank you very much.
Certainly, sir. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and one on your phone, and await your turn to ask the question when guided by me. If your question has been answered before your turn and you wish to withdraw your request, you may do so by pressing star and one again. We have our first question from Mr.
Pinakin Parekh from JPMorgan. Please go ahead.
Sir, my first question is on understanding the petchem business now. Yes, the spreads are very high for NASDAQ trackers, but we also have seen a sharp increase in volumes. Now on multiple petchem, you know, facilities. Can you give us a sense of how the petchem volume should pick up over the next few quarters and which product category would be there? And my second question is on the new refinery that are flowing
Sorry, I I came to interrupt. Actually, voice is not very clear. So you'll have to repeat the first question also.
Sure, sir. Sir, my first question is, if I look at the petchem business, it has seen a sharp improvement, both on volumes and margins. Now margins were very strong for the naphtha crackers. But sir, I just wanted to understand better the outlook on volumes, given that IOCL has multiple petchem facilities, which are under construction, in terms of how will the petchem volumes evolve over the next few quarters and which product categories will we see this? Second is there more clarity on the new refinery that has been approved by the Board in terms of when would the CapEx start?
What is it only going to be a pure refinery? Or will it eventually involve petchem? Would the company be open to inducting parts of The Middle East into the refinery?
Yes. So first question, our petrochemical facilities are largely same as of now, except that Paradev polypropylene facility is now running at around 50% to 55% capacity only. So we are only regaining the volumes which were there in the last year, and that is helped by the gold crack spreads on polymers also. But going ahead, considering that our PP at Paradeep is underutilized because of the shortage of feed, we are also planning to import propylene to increase the capacity utilization of our such facility. So largely, the product slate remains the same.
Our new projects are still some time to get commissioned at various refineries at Baroni or Gujarat. So largely, these facilities will continue. Only thing, MEG at Paradeep will come most probably in October 2021. So that will get added in 'twenty one, 'twenty two year, which has a capacity of three fifty seven Kt. Now on your question of new refinery, so that is a 9,000,000 metric ton refinery.
And we have a petrochemical integration of about 5.5% there. And polypropylene facility is and we said to come up at present. But we also have plans to increase the petrochemical integration at that refinery in perhaps the second phase, but that will definitely entail more CapEx. But we will we are looking to increase the petrochemical integration at that refinery in future. Does that answer your question completely?
Yes, sir. Thank you very much, sir.
Thank you. We have our next question from Sabri from MK Global. Please go ahead.
Yes. Good morning, sir, and congratulations on good set of numbers. I have three questions. The first one is relating to your petrochemical segment itself. So you reported close to 2,000 crores of EBITDA in Q3.
And looking at the spreads, there has been recovery, but we are still probably near the mid cycle in terms of petrochemical deltas. So is it fair to assume now that the petrochemical on a sustainable basis? Of course, there will be risk regarding the global scenario. But based on the current scenario, is it fair to assume that you would be doing close to INR8000 crores, INR9000 crores of petrochemical EBITDA every year?
Look, that is a factor of the spreads, but assuming that the current spreads prevail, yes, then this assumption may be a valid assumption. Because our focus is on increasing the utilization of our facilities, and then the profit depends upon the cracks available.
Right. Second question is on this hydrogen policy. So this will be implemented as today's budget that's stated that it would be implemented from FY twenty two. So you have also started some pilot regarding hydrogen CNG and also hydrogen manufacturing. I think I also is looking in a big way.
So anything you want want to add on this, what your plans are on this new hydrogen business?
We have got very ambitious plan hydrogen is considered to be the keenest fuel. So we have various plans and our R and D center, which is a flagship center among the oil industry and even in Asia, is working a lot a whole lot of things on hydrogen. But perhaps it is too premature to diverge more details on that. And perhaps it is also too premature considering that it will have some gestation period. And the profits of HydroCharge may not immediately be captured in a year or two.
Okay, sir. And third question is on your on the LPG subsidy scenario. So right now, the prices have gone up significantly. I think Arab Gulf prices have reached around $600 per metric ton. And in since six, seven months back, almost the LPG prices, both subsidized and non subsidized are somewhat aligned.
But, again, I think some deviation has taken place, but, of course, the subsidized prices are not reflected anymore. So what is the scenario right now? So you have started suffering any under recovery on the LPG front any any compared to what it was six months ago. And and right now, what would be the portion of total consumers which are, like, which are getting subsidy? I mean, if you've got around ten, twelve crore customers of which, how much how much would be, like, customers would be would be eligible for this subsidy considering that LPD price
is available? So initially, post to this pandemic, the prices have had softened in line with the crude prices also. But then as you know, the LPG prices get hardened during winter months. So that is why this hardening was there in recent months and which will continue perhaps for one more month. And we are seeing the prices to soften in the months forward.
But since May, the Ad Delhi, there has been no subsidy. And likewise, at many cases, there was no subsidy. So the subsidy was only at the distinct far flung places and for which the government is fully compensating us. So there has been no under recovery on LPG fund. And considering the small volume of subsidy, there is no apprehension of the same remaining unpaid for a very long time.
So as I said, we are hopeful that our GOI receivables perhaps may get liquidated by end of this year.
So in last this January also, you didn't have any major subsidy, you are you are saying. Right?
At Delhi, no. And also similar markets, no. So wherever the distant places are there, there only the subsidy is there for which we launch the claims and the for the receivables, and we are confident of recovering that very fast now.
So just a very rough
cut I would request
you to
It's it's the same question. Just one last thing. Just a very rough cut ballpark of out of your total LPD customers, how much out of this would be the subsidy eligible ones would be how much on the percentage terms?
I do not have that data right now, but then we can provide you separately.
Okay. Thank you so much, and all the best.
Thank you. We have a question from mister Sumit Rora from Smartphone Capital Limited. Please go ahead.
Yeah. Hi, sir. Very good morning to you. Sir, it's very heartening to see, you know, our marketing performance has reported very good set of numbers of 7,130 crores. Stripping off the inventory gain also, you know, we've seen very strong numbers of 5,400 crore.
So, sir, can you please throw some light on marketing? How do you expect this performance to continue particularly in this environment where people are very concerned about the government not cutting excise? So that will be very beneficial for our investors to, you know, understand our marketing performance. Sir, secondly, just touching base, you know, on the point which the finance minister made, you know, in the budget yesterday regarding the asset sale pipe of of the pipeline business of IOC and other companies. Sir, it's it's very heartening to see that you added actually 350 odd kilometers, as you mentioned, to 14,800.
So, sir, can you please help us understand, you know, on this asset pipeline plan? Because, is my understanding correct that, the value of four kilometer pipeline, you know, could be about INR 6 to 7 crore rupees, which effectively means that INR 1 lakh crore could be the value of our pipeline, which is our market cap today? Your highlights on this will be very helpful to us, sir. Thank you very much.
Yeah. So first on marketing margin.
So
while presently, the prices, because of a sharp increase in the prices in the recent past post Saudi Aramco's announcement of 1,000,000 barrels per day, voluntary cut up to March, the prices had hardened to some extent. And but then we expect that perhaps postmark this hardening of the prices may not sustain and because the fundamentals are weak for crude oil demand. So
This conference operator, please help me with your company name, mister Mark Smith. Hello? Please unmute your line. Mister Mark Smith, am I audible? Please unmute your line.
Hello, mister Mark Smith? Please help me with your company name. Hello? Hello?
Unlocking the real worth of our assets. And in that direction, despite asset monetization concept of pipeline has been mooted. So we will experiment initially with perhaps a small stake offloading towards a monetization tool. But this is only at a preliminary level, but but definitely, I agree with you that our assets have a huge potential, and there are a lot of investors who are looking to invest in our pipeline assets, and that will unlock the value of our assets.
So, sir, so sorry. If if I understand correctly, what my my estimate is that, you know, the value of each kilometer of pipeline is between 6 to 8 crore rupees. So that understanding is correct. Right, sir?
I would not like to put any value to that Mhmm. As of now. So but then definitely, even if you put up, say, EBITDA multiple on our pipeline, I would tell you, perhaps you can estimate the value of our assets.
Okay. Sure, sir. Thank you so much. That's very helpful, and wish you all the best, sir. Thank you.
Thank you, Mr. Rora. We have our next question from Mr. Abdul Sabnis from CIMB. Please go ahead.
Yeah. Am I audible?
Yes.
Yeah. So basically, again, question that relates to the new refinery.
Can
you hear me now?
Yeah. Yeah.
Okay. As I said to ask, sir, exactly I mean, I I think the press release pointed out that we may need to seek approvals of ECIO and stuff like that before you start to work. Will you just clarify exactly what kind of approvals are required and by whom and what is the time that you're looking at before you actually start working on the project?
And Sorry. Mister Abdul, actually, still your voice is not
very clear. So if you can be a little louder. And little slow. And little slower.
Okay. Okay. Firstly, as I said, I think the press release mentioned that you may need to seek approvals of, okay, before you start to work on the refinery. So if you could clarify exactly what kind of approvals are required by which bodies, you know, for setting up that refinery, and when do you expect all these approvals to be in your hand and, like, as I said, by by when they actually actually start work.
Hello, mister Mark Smith? Hello?
Actually, you know, we want to get it done. I would assume the fastest way to get it done is bring it on your own balance sheet. Bringing in Chennai Petroleum, I can understand the sort of the sentimental logic in terms of the old and stuff like that. But, of course, if we look at Chennai's own financials. Make it quite clear they will really struggle to put in their own sort of contribution to it, which could create problems for you going forward.
So that was the second question as to as to what is the logic of putting it in the JV rather than an own balance sheet. I'll stop here.
So first, about the approvals, since this is a joint venture refinery, approval of Deepam and Nipiayo is required for putting up a joint venture by a public sector unit. So these approvals will be required. As far as we said, other statutory approvals are concerned, we already have the environmental clearance and the consent to establish is expected very short. So the only approval perhaps which would require is the Deepam and ETI Yog approval, and we believe this being a public sector project should not be a problem. Now you are also correct that it was perhaps not possible for CPCL to put up this project of this magnitude on its own balance sheet.
So that is why we have done a JV with CPCL. The debt equity is two third, one third, and the equity part will be contributed 25% each by CPCL and IOCL. And balance 50%, we will scope for our strategic or financial partner. But till the time we identify such partner, the balance equity will also be funded through quasi equity instruments. So then this in that induction of a partner will take its own time in the future.
Yeah. Does that answer your question?
I mean, I had a maybe I had a more philosophical question as to why are you looking for a partner in the first place.
We are looking for a partner because definitely this project, we have this project and we may also have some future projects, not necessarily refining, but also petrochemical, also renewable pipelines. So we have huge CapEx program going forward. And so we are trying to conserve our money to the extent possible, at the same time, not stopping the CapEx plans of the company. And these are generally irrational in doing that.
Thank you so much. If I may just add, is it possible to give now the broad I mean, just to reiterate the CapEx figures for this year and next year, at least the broad numbers?
The CapEx for this year was about crores to INR33 crores, including our JV subsidiaries. And though until December, perhaps we have done about 64%, 64% of that CapEx only. So let us see, we are trying very hard to complete that CapEx for this year. Definitely, we are not going to exceed this year. And next year also, we expect the CapEx to be perhaps within this range of INR 25,000 to INR 30,000 crores.
Thank you so much, sir. Thank you.
Thank you. We have our next question from Mr. Vivekanan S from Ambit Capital. Please go ahead.
Hi. Thank you for the opportunity. Can you talk about the ethanol blending of fuel and blending of biodiesel? Now that the targets have been advanced by the government, what does it mean for us? Is it just a pass through?
Or are there any implications on our CapEx and working capital, both with respect to government receipts?
So this even with the present lending norms, it is a pass through, and it is going to be the same way even with higher norms of blending. So no implication on the company as such.
So just to clarify, sir, do we recover both the CapEx as well
as the OpEx, or is it only the CapEx or OpEx? So for ethanol blending, we do not put up any CapEx. We source the we source ethanol and only blend with our fuel. So that does not entail any CapEx, and the the price differential is definitely a pass through or a surrender, whatever the case may be.
Right. So the two g biorefineries that we invest in, those are small projects,
I understand, two g ethanol. For that, also, we get recovery from the government. No. No. No recovery on that.
Those projects from government, but those projects are being put up on their own liability or.
Okay. And and how how do those projects become I mean,
how do we earn return on that CapEx? I mean, I'm not able to understand that. Sorry to. But as I said, it is both viability as well as our strategy in this year to diversify into the energy basket. So and that all potentials, whichever.
So but and considering our volume, those projects are of very small scale.
Okay. Understood. Thank you.
Thank you. We have a question from mister S Ramesh from Nirmal Bank Equities. Please go ahead.
Good morning, and thank you very much. My first question is, can you give us some idea about the progress you're making on your compressed biogas projects? And when you'll start getting the benefit of that? And how will the, you know, pricing and economics work in terms of the margins you earn on that bio CNG?
So you started with the CBG compressed biogas, I believe.
Yeah. Yeah. Yeah.
So, presently, we are sourcing compressed biogas from the plants from from the plants which have been put up by entrepreneurs. We have our own plant in a JV with that plan is of IoT, which is our JV at Namakkal. So we are sourcing CPG from there also. We are retailing presently from 15 retail outlets, and we are the only company which is retailing CPG from the retail outlets. We are also putting up our own CPG plant at Gurakpur, but that will come take some time to come up.
No, presently no major CapEx on CBG plants per se. And as far as viability is concerned, so we are we have guaranteed a price of 46 per kg for the CBG, which we source from CBG brands. And that is why.
Okay. So in terms of the numbers we hear, what is the eventual number of CVG plants from which you'll source it? Can you get a sense in terms of the volume of CVG you'll be sourcing, say, over the next three to five years? And how much margin you'll launch, say, per kg?
That will depend upon the pace at which the CVG plants are set up. So presently, not many plants have been set up. So we though on industry basis, more than 500 alloys have been given for IOC. Also, more than 300 alloys have been insured. But CVG plants will take their own time to come up.
So we do not expect any sudden spurt in the CVG volumes in a short term time.
Yeah. So just extending the thoughts on the renewable energy. In terms of your strategic distribution projects, there are big numbers being mentioned in your annual report. So when do you see the benefits of your direct investments and the JVs in the strategic projects showing in your P and L and balance sheet. Can you give us some sense in terms of the volumes you expect to achieve over the next three to five years in the CGD?
You you are mentioning about CGD, I I believe, not CGD.
No. This is on the City Gas distribution where you got all the licenses from the PNGR. The
The City distribution. Yeah. City Gas distribution, we have 17 GAs on our own, plus INR23 crores in joint venture, up to INR10 crores. We are having a CapEx outlay of about INR15000 crores. About INR16000 crores of CapEx.
And but then again, CGT penetration, at least in the domestic, is little time taking. So immediately immediately again, like CPG, we do not expect any immediate contribution from these CGT utilities in a very short time.
Okay. Just one last thought on the monetization of the pipeline assets. Like have you done any preparatory work? Because Gale has already got subsidiary accounting for the pipelines. So we want to bring in some financial investors there to experiment the stake sale.
Do you have any similar plans to transfer some of your pipeline assets to a subsidiary? How do you plan to go ahead in terms of laying the groundwork for a stake saving any of your pipeline assets?
In the case of Gale, perhaps the bifurcation of Gale was discussed for last perhaps more than two years, and it is now materializing. In our case, it is to the extent actually, and we will now work upon it. The idea was only that the potential of our assets must get unlocked, and then we will see to what extent we monetize our assets. But it is at a very preliminary stage.
That was helpful. Thank you very much. I'll join the queue. Thank you.
Thank you, mister Ramesh. We have a next question from mister Amit Rasagi from UBS. Please go ahead.
Yeah. Thank you, sir, for
giving me an opportunity. Sir, my question relates to the pipeline monetization. We have been considering pipeline assets as one of the core for, you know, strength of our business. And if you monetize some of these pipelines, don't you think that the strength of the business will get affected and, you know, competition will also get the equal edge which we have right now today? And the second thing, what are we planning to do with this money?
Is this money redistributed to the shareholders back in the form of dividends, or would it be redeployed back into the refining business?
So as I said, this is at a very preliminary stage, and we have not thought about the model which will which we will adopt. One model could be in waste, and it is not necessary that we do 100% stake sale of our such assets and not necessarily enter all pipelines together. We may select one or two pipelines to begin with. In any case, the operation and control of the pipelines will remain with us. We will not let it go with from our hands.
Further, our pipelines are mostly dedicated from our facilities to the market in the case of product and from ports to our refineries in the case of crude. So we do not think it is of any use to the competition because the decision to give products from our refineries is with us only. So we do not think that it will have any adverse impact as far as from the perspective of competition.
And some more we will be doing with the cash, sir, which will generate through this route?
Well, this the purpose of asset monetization is to boost the CapEx by the CPSCs. So this will help us in boosting the capital expenditure by by us. But then if we adopt the indirect model, yes, initially, whatever whatever monetization we do, that will be available to us for doing further CapEx. And then the option is with us to what extent we retain it for doing the efforts or to what extent we distribute.
Sir, but don't you think that, you know, monetizing pipelines and then putting money in the re that may be a further bad decision because of the performance of the refining businesses?
So we haven't told that we are going to put up in refineries. So I said we are scouting whole whole lot of projects ranging from petrochemicals, renewables, hydrogen, etcetera, etcetera. So definitely, we will like to put that money only in more viable projects or more profitable projects.
Okay. Thank you, sir.
Thank you. We have our next question from mister Varadarajan Shiva Shankar from Systematic Share and Stock Limited. Please go ahead.
Thank you. So I have three questions. Firstly, LPG. Typically, like, you know, we have seen in the past when international prices go up, the subsidy limit for the year gets achieved and then the retail prices are increased. This time around, what we observed is that the subsidy provision still remains and you already started increasing the retail prices.
So is there a change in the thought process or the policy?
I am not able to hear you properly.
Yeah. Is it better now, sir?
Yeah. It's better.
Yeah. Typically, for LPG in the past, what we observed is that, like, when international prices go up, the subsidy limit for the year gets almost exhausted, and then you raise the retail prices. This time around what we observed is that the subsidy is still there, but you already started raising the retail prices. Is there a change in policy or in the thought process?
Actually, the issue price of LPG is decided by government of India. So they have they are informing on a month to month basis that what should be the issue price based upon the market determined price based on the formula which is there. So as I said, since May 20, there has been no subsidy in Delhi and similar markets. But at other places where perhaps the freight incidence is more, there is some subsidy which is payable from government of India. So the change of issue price from month to month is a government issue, and that is being communicated to us.
Okay. Question on the LNG import contracts which you had in the past. Currently, Ennore, whatever you are importing is on those contracts or are those also, like, import importing spot?
I couldn't get you.
So LNG import at Enoor, you had entered into some contracts. So what is the current mix of imports? Is it all those contracts or which you have bought as well?
So we have certain long term contracts, and we are taking gas against those long term contracts. Are you talking about customers or talking about the sourcing of gas?
Sourcing, sourcing, sir.
Sourcing. Yeah. So we are taking gas as per those contracts. And so but I I could not understand your question properly.
Is there any spot volumes as well in NNOR, sir?
Pardon?
Any spot volumes in NNOR?
Spot spot. Spot volumes. Spot volumes at NNOR?
Yeah.
Okay. I think, no. The the long term contract quantity is sufficient to cater to the demand. So Okay. We Okay.
Have at various ports, we have a spot plus contract. So that we see from time to time, which is beneficial to take at each port.
My last question on working capital, sir, the prices of crude had actually increased in the last quarter. So the case would be prices of product, but we have had a reduction in working capital. Was there a significant destocking somewhere?
Again, think you should repeat your question, Vernadjan, because it's not been properly articulated.
Yes. Basically, had incremental crude prices go up in the last quarter as well as product prices. But you have had a fall in the working capital is what you mentioned initially. So is there a major destocking? So your volume inventory has been cut somewhere significantly as a product for crude?
Yes, you are right. Our inventory levels for both crude and products are lower than what was there as on March 31, and that is also helping us to reduce the working capital.
Would you be able to give the volume, sir?
Pardon?
Would you be able to give us the volume?
You want the volume, please?
Yes, that's right.
So as on December 31, we have total 15,000,000 tonnes as 19,000,000 ton on March 31.
This is crude or correct?
Are both. Both together. So but if you want breakup, that can be given separately.
Okay, Sushar. Thanks a lot, sir.
Thank you. We have a next question from Mr. Manikanthagare from Axis Capital. Please go ahead.
Good afternoon, sir. Thanks for providing me an opportunity. I have two questions. First one is on the Nagapatinam new refinery, million tonne, which was mentioned as INR 31,500 crores as CapEx. Can you please give us what amount of that INR 31,000 crores belongs to dismantling of existing 1,000,000 tonne refinery?
And what is what portion of this is going towards the Pac Van unit? That's the first question.
Monica, I think you should come back again on this question. It's not very clear.
Oh, okay, sir. So it's mentioned that the 31,000 final crores is is is a CapEx for the 9,000,000 ton refinery. Does that include cost for dismantling the existing refinery? And what's working of the
You mean to say dismantling the existing refinery?
Yes,
Oh, that's that's maybe that is included in the site development expenses. I do not I do not have it right now, but that will that may be very small almost.
Okay. And what portion of this is is towards the Petchem unit that sir has mentioned?
Petchem integration, I mentioned 5.5%, but cost thereof separately, we can give you separate.
Okay. So why I'm asking this question is, sir, if I look at Farvik cost for 15,000,000 ton refinery as of FY sixteen, I see that it is that costed us around 35,000 crores. I'm just trying to understand what configuration difference is there between Paradeep and Nagapatnam refinery that's there currently.
Okay. But then that was about my approval was about ten years back for Paragit. So
The final cost is 35,000 crores.
35,000 crores was the final cost, and the final cost for the TBR merit may after five years, maybe something different. So approval to approval, if we compare, so this was against INR 30,000 crore per annum. This is now INR 31,500 crore as of now after ten years. But then these details can be given you separately.
Yes, sir. The second question is what can you give us the status of pipeline? At what percentage it is
We we plan to commission the complete pipeline by February 22.
Understood. And if I can squeeze in one question here, I see that there is slight increase in LNG volumes quarter on quarter basis. Was there any new customer addition during the quarter?
But that that's a problem. That is a regular feature, actually. But, Arjun, if you are asking about a no no fresh customer.
Understood. Understood. That's all from me. Thank you, sir.
Thank you. We have a next question from Mr. Vineet Joshi from Goldman Sachs. Please go ahead.
Hi, sir. Am I audible to you?
Yes.
Hi. Thanks a lot for taking my question. So my first question is on, petrochemicals. Can you give us, your current capacities and the breakup between the various products and how it would look like, let's say, two, three years down the line?
So I perhaps that this was also the first question of this con call. And as I as I mentioned, our product is placed continues to be the same as was there last year only that and this MEG will get added as part of the in October 21 of this year, and we mentioned three sixty seven k t was capacity. And Yeah. 57 Kt. So otherwise, we have presently LME at Gujarat, linear carb benzene at Gujarat, PXPT at Paradev, and PX polymer cracker at Faripa.
So those capacity continue as such. And PP at Faraday, again, whose utilization is less, and we plan to import propylene to increase the capacity utilization. And then we will come in October 21.
Okay. And sir, on the thanks a lot for this. So on the on the pipeline monetization plan, will will there be what kind of tax implication would that pertain to in terms of capital gains? If you can provide some some, like, directional color in terms of, like, you're thinking about that in terms of driving this monetization.
K. So the the provisions are already there, and you are aware of the tax provision. So those will get attracted. So now I don't have a figure how much we will do, for which pipeline we will do, what will be the value, what will be the capital gain tax on that. So I cannot give you further details on that.
But then, definitely, the tax provisions, whatever is there, have to be completed.
Okay. And last question, sir. In terms of your EV charging rollout, I mean, can you provide some color around how many stations we already have EV charging and what's our plan for future?
So EV charging, exact number of stations, do not have right now, but we can give you separately. But then that can it still continues constitutes a very small proportion of our operations. So I think from a financial analysis point of view, in the immediate near, perhaps no no no major thing.
Is there a medium term target that that we have that, let's say, five years or ten years down the line, what percentage you would be looking to electrify?
I do not have presently. We will give you separate. Okay.
Thanks a lot, sir.
Thank you. We take our last question from mister Vidyadhar Dinde from ICICI Securities. Please go ahead, sir.
Yeah. Thank you. So my first question is, can you give the cost of your crude inventory in December?
December migration was the closing rate was $47.42 per barrel.
Okay. And has the volume
I think in September, you
had mentioned crude inventories around 9,000,000. Does it similar or lower?
So it is lower. Now the idea is person also wanted. So you take you can take it down. Crude is about 7,000,000 tons as of December 31, which is lower from the earlier level.
Yeah. Significantly lower. Yeah. And the second question was on this polypropylene. When do you expect these issues to be resolved, and when do you expect to run the plants at full capacity?
And is
it because the propylene yield in the refinery is lower than expected? Or is it
with the expected yield also the plant control net indication?
Yes. One was that some feed stock was being diverted towards gasoline pool, that gasoline demand is very robust. Second, we had shutdown also of FCC unit in Paradeep, so that because of that. But then even if these things are taken care of, still we have some spare capacity of PP for which we are planning to enter into long term contracts for property and imports.
So when do you expect it? What I mean from the past week?
The first parcel we have ordered yesterday. The first test parcel we have ordered yesterday, but that is a small volume. So based on this experience, we will then line up our long term.
Okay. Sure. Sure. Yeah. The the last question is on the pipeline.
Is it certain that you
want to follow the invite option, or is
could it also be listing the pipeline in a subsidiary and telling us small statement retaining majority to the site? Could that or is it fairly certain that you're going to follow the invite option?
Well, nothing is certain as of now. As I mentioned, this is at preliminary stage.
And so look at the
various models which are available.
Sure.
Sure. So could you also consider maybe listing hiring of your petrol stations into a subsidiary and maybe sell 26% because that could really because I
think that is probably your best effect. Most important asset, which
is valued even in today's environment when refining outlook longer term also, there are some question marks. And we've seen some transactions happen in The US where seven Eleven paid massively for some 300 3,900 petrol stations, though most of them are probably owned. They paid a massive amount. So could that be a possibility at some stage? I will not your petrol stations into a subsidiaries.
Presently, it is not on our radar, but the possibility of any such thing to unlock the value cannot be ruled out.
Okay. Thanks a lot. Thank you very much.
Thank you, mister Dinde. I would like to hand over the call to the management team for closing comments. Over to you, sir.
Thank thank you for participating in this call call. So we look forward to meet you in the after the next quarterly business. Thank you.
Ladies and gentlemen, this concludes your conference for today. We thank you for your participation and for using iJunction conference service. You may please disconnect your lines now. Thank you, and have a great day.