<div>In 2010-11, the revenue of Mangalore Refinery and Petrochemicals (MRPL) was Rs 30,000 crore less than that of its parent company, ONGC. Regular capacity enhancements at MRPL’s grassroot refinery, which was commissioned in 1988 with a 3 million tonne annual crude refining capacity, has helped bring down the gap to Rs 12,000 crore in 2013-14. <br /><br />At present, MRPL has the capacity to process 15 million tonnes of crude — up from 11.82 million tonne per annum — after the Rs 15,000-crore expansion drive over the past four years. In addition to improvements in production, the upswing in prices of refined products and higher export earnings due to an appreciating dollar have helped the company perform better.<br /><br />“A major concern for the company was its refining margins,” says P.P. Upadhya, managing director, MRPL. “We are past that hurdle. The complexity of the refinery has been improved to 10.5 from 5. As a result, the company’s gross refining margins have also improved to about $3 a barrel from $1.98.” Upadhya expects margins to go up at least by $2 a barrel in the first half of FY2015.<br /><br />Valued at Rs 71,810 crore, MRPL has been progressing at great pace — it recorded a compound annual growth rate (CAGR) in net sales of 22.4 per cent over the past four fiscals. Shell-MRPL Aviation Fuel & Services — a joint venture between Shell and MRPL that markets aviation turbine fuel — too performed well; its turnover rose 34 per cent in the last fiscal. <br /><br />This uptrend in the last fiscal marked a significant change in the company’s performance compared to the year before. In 2012-13, MRPL posted a net loss of Rs 757 crore as a result of a shutdown due to water shortage. During the year, the price of crude products also fell, resulting in inventory losses, lower operating margins, higher depreciation and interest costs. <br /><br />Upadhya believes the future of MRPL is bright. “By the end of this financial year, our upgradation projects will be complete; better margins can be expected thereafter.”<br /><br />Presently, MRPL is focused on direct marketing of petroleum products. In FY2012-13, its turnover from direct sales was Rs 3,750 crore, compared to Rs 2,755 crore in the previous year. With the government planning to decontrol diesel prices, MRPL is gearing up for a big retail push. <br /><br />(This story was published in BW | Businessworld Issue Dated 11-08-2014) </div>
