Impact of crude contamination has been contained, was lower than anticipated: Hindustan Petroleum CMD

The impact of the recent chloride contamination is not as bad as anticipated and has been contained, Hindustan Petroleum’s Chairman and Managing Director (CMD) Vikas Kaushal stated in an investor call on Friday (October 31, 2025).

Speaking to investors following the announcement of their second-quarter results earlier this week, Mr. Kaushal said that a part of the Mumbai refinery that had to be shut down following the impact of the contaminated fuel is now “fully back and ramping up to full capacity”.

“Good news is that we are almost through with that, except dealing with some of the contaminated products,” he said, adding, “as of last night, the unit which was down is fully back and now we are ramping up to full capacity.”

Earlier this week, the state-owned refiner had stated that a part of the crude oil it had received from a supplier, Hindustan Oil Exploration Company, had been discovered to be carrying “very high salt and chloride content in the [acquired] crude oil”.

HPCL said this had caused operational issues during processing, including corrosion in downstream units and yielding suboptimal outputs in their Mumbai refineries. In response, the supplier had stated it was examining the claims and was in discussion with the refiner. 

‘Impact can be absorbed’

Mr. Kaushal held the impact from contamination was “manageable”.

He informed that the refiner has a “bad product”, essentially naphtha, which is “about 100 thousand metric tonnes (TMT)”.

“We had no option but to export it at a discount that knocked us by about ₹150 crores,” he said. The CMD also informed that there would be a postponement of revenues owing to one of the final finishing units being down and the company having to hold back semi-processed products. The revenues are expected to arrive later next month, he added.  

Further, Mr. Kaushal informed there is some leftover crude, and the refiner is trying to dispose it.

“As and when it is done, there would be some more impact, but we do not expect it to be massive,” he emphasised. Finally, the senior executive underlined that with the (part of) unit out, there was some “extra movement” they had to do. He held that the company would be able to contain it within the suggested ₹150 crores.

“As a management team, we are very comfortable at being able to mitigate the financial impact of it,” he stated.