The company is currently in the process of finalizing the location.
Hindustan Petroleum Corporation Limited (HPCL) is executing the Visakh Refinery Modernisation Project (VRMP) to modernize and enhance capacity .
Post modernization, the refinery will produce petrol and diesel with BS-VI specifications; increase in refining capacity from 8.33 million metric tons per annum (mmtpa) to 15 mmtpa by setting up various process and utility units and improve refinery distillate yields from 76% to 86%.
A trading desk helps companies procure crude oil from the international market on a real-time basis, helping cut import prices by locking in the best price and quality.
India is the world’s third-largest consumer of crude oil and depends on imports to meet over 85% of its requirements.
HPCL is the second oil marketing company planning to set up an international trading unit. State-run Bharat Petroleum Corp. Ltd (BPCL) is also evaluating setting up a similar facility in Singapore, Dubai or Gift City in Gujarat.
Indian Oil Corp. Ltd (IOCL), the country’s largest refiner and marketer, has a trading desk in Delhi.
India’s public sector refiners Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL), and Hindustan Petroleum Corporation (HPCL) source 70% of crude oil on term contracts and the rest on a spot basis.
This helps companies diversify their crude supply basket and address market volatility.
Term contracts are long-term oil purchase deals with fixed volumes and pricing and spot contracts are immediate purchases from suppliers
For Indian companies, West Asia is a natural source of crude oil supply because of the region’s proximity.
The trading office may help HPCL trade in energy derivatives, international financing, and other joint ventures that the company may plan in the future.
HPCL had similar plans around eight years ago, which were put on the back burner as the company wanted to study the prospects of setting up a trading desk in detail.
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