Hindustan Petroleum Corporation Limited (HPCL) is set to diversify its crude oil sourcing portfolio with plans to acquire Venezuelan crude oil for the first time, according to an announcement by the company's Co-Chairman.

Strategic Sourcing Initiative

The move represents a significant development in HPCL's procurement strategy as the state-owned oil refining company seeks to expand its crude oil supply sources. This marks the first instance of the company considering Venezuelan crude oil for its refining operations.

Compliance with International Sanctions

In conjunction with the Venezuelan crude oil announcement, HPCL's Co-Chairman made it clear that the company does not purchase sanctioned Russian oil. This statement underscores the company's commitment to adhering to international sanctions and maintaining compliance with global regulatory frameworks.

The clarification comes amid ongoing international sanctions on Russian energy exports and demonstrates HPCL's approach to navigating the complex geopolitical landscape affecting global oil markets.

Market Positioning

HPCL's strategic decision to explore Venezuelan crude oil while avoiding sanctioned Russian oil reflects the company's efforts to maintain operational flexibility while ensuring regulatory compliance. This approach allows the refining major to diversify its supply chain while adhering to international trade restrictions.

Hindustan Petroleum Corporation Limited management has revealed expectations of rising under-recovery in its LPG cylinder business during a recent conference call with stakeholders.

Financial Impact on LPG Operations

The company's management disclosed that cylinder under-recovery is anticipated to increase by close to ₹120.00 per cylinder. This projection indicates potential financial challenges in the LPG distribution segment.

Implications for Business Performance

The projected increase in under-recovery represents additional cost pressure on HPCL's LPG operations. Under-recovery typically occurs when the selling price of subsidized products falls below the cost of procurement and distribution, creating a gap that impacts company margins.

This development in the cylinder business could influence the company's overall financial performance in the LPG distribution segment, as higher under-recovery amounts directly affect operational profitability.