Ceat Financial Services, in a recent research report, has come up with an interesting comparison of two public sector oil majors, Hindustan Petroleum and Bharat Petroleum.

The report points out that while BPCL has outperformed industry sales in the light distillates and the crucial high-speed diesel segment, HPCL has fallen behind industry average in the high-speed diesel, motor spirit and the liquified petroleum gas business.

It notes that the two majors have similar marketing infrastructure and equal market share in sales of petro-products. BPCL's LPG share is the same as HPCL, despite owning more than half the bottling plants. In the retail segment (MS, HSD, LPG and light diesel oil) BPCL with a market share of 27 per cent is marginally ahead of HPCL (24 per cent). In the direct sale market, BPCL has around 16 per cent compared to HPCL's 17.2 per cent. HPCL is ahead of BPCL in terms of infrastructure owned, notes the report -- it owns LPG import facilities and he 3.1 million metric tonnes per annum Mumbai-Pune product pipeline while BPCL does not own such facilities. However, BPCL is expected to commission the 250 km Mumbai-Manmad product pipeline by April 1998.

In refining HPCL holds a distinct advantage, says Ceat. HPCL owns 10 million tpa capacity and 3 million tpa in the joint sector (in MRPL). In contrast, BPCL has one refinery of 6 million tpa at Mumbai.

Financially, Ceat notes, HPCL is in a better position because of its more advanced capacity implementation schedule. Apart from providing the vital depreciation advantage, increase in gross block also increases returns under the APM. In contrast, most of BPCL's capex plans are in JVs (in the refining area). BPCL is also lagging behind HPCL in fund raising plans, with less internal accruals projected.

Ceat says that if the administered price mechanism continues there is no downside to BPCL's future.

The views expressed are those of Ceat Financial Services and not those of The Financial Express.

F.I.R -- Asian oil trade up

Asian oil imports will continue rising this year and again account for the largest element of trade growth in 1998, Reuter quotes a Clarksons Research Studies forecast Tuesday. Clarksons said Asian oil imports would increase by 61 per cent this year to 6.8 million barrels per day (BPD) - equating to an approximate extra 3 million dwt of vessel demand. In its latest Oil and Tanker Trades Outlook, Clarksons also predicted that steady production levels and potential refinery capacity growth could push Asian imports up a further 500,000 bpd to around 7.3 million barrels per day in 1998.

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