BENGALURU/NEW DELHI Bharat Petroleum Corp , India’s largest fuel retailer, has cut its fiscal 2020/21 capex target by 36% to about 80 billion rupees ($1.1 billion) from 125 billion rupees because of the impact of the COVID-19 pandemic.
Oil companies across the globe have cut their spending plans as the pandemic has driven down oil prices and fuel demand.
“We have taken a look at all the projects … on smaller projects we have taken a very harsh look because we have to focus on what is important and what is going to give us profit,” said N. Vijayagopal, Bharat Petroleum’s head of finance.
“We are shifting the expenditure from year 2020-21 to 2022-23.”
He said old projects below 1.5 billion rupees could be delayed to next year to maintain the current focus on petrochemicals and refinery expansion.
BPCL is operating its refineries at about 70-75% capacity in the face of slower demand and subdues margins on oil products, which make export sales less attractive.
The company reported a gross refining margin of $0.39 per barrel in the three months to June 30, when Indian fuel demand growth plunged. However, Vijayagopal said the company is hopeful of improved margins in the next two quarters and is planning to open about 1,000 fuel stations in the current fiscal year, on a par with last year.
Vijayagopal also said that the planned privatisation of BPCL was on schedule and is expected to be completed by March 2021.
India has extended the deadline for initial bids for the federal government’s stake in the company to Sept. 30.
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