Chennai Petroleum to convert naphtha into gasoline and LPG

CPCL closed last year with a turnover of Rs 8, 630 crore and an after-tax-profit of Rs 302.89 crore as compared to Rs 6,273 crore and Rs 63.71 crore clocked respectively the previous year. The board has proposed a dividend of 35 per cent.

"The increase in profit is owing to better refining margins, holding gains on stocks and better finance management," says Ramachandran. "Last fiscal, CPCL's gross refining margin was $3.9 per barrel. In the last quarter the margins went up to $7." The crude throughput for 2002-03 went up to 6.82 million tonnes from 6.18 million tonnes logged the previous fiscal.

On the finance side, CPCL's interest cost came down by Rs 21.44 crore to Rs 106.65 crore last year. Further savings are expected from the reduction in wharfage charges levied by Chennai Port Trust this fiscal.

But the demand for petroleum products grew very slowly while the growth was negative in respect of kerosene and naphtha. "The demand is based on the performance of the overall economy," says Ramachandran. Offsetting the slow domestic growth, CPCL exported high-speed diesel and aviation fuel to Sri Lanka through IOC.

Other than the refinery expansion, CPCL's Rs 92-crore project to improve yields of LPG, gasoline and reduce coke and clarified oil production besides reducing emissions will go on stream next year. The company is also evaluating various options for implementing a desalination plant. Tata Consulting Engineers have been asked to prepare the feasibility report.

On the other hand CPCL is waiting for Neyveli Lignite Corporation (NLC) to get the green signal from its parent ministry to go ahead with the 492-mw power project. The power plant will be fired by refinery residue fuel and the project is expected to cost Rs 2,800 crore.