Bharat Petroleum Corporation Ltd (BPCL) will cut its capital expenditure for FY2020-21 by 36% or ₹4,500 crores. BPCL has categorised their projects into minor and major projects. All projects which have an investment of less than ₹150 crores is categorized as a minor project and is put on hold.
What it means
Given the challenging times, the Company is shying away from undertaking huge Capex which might impact their borrowing and debt-equity ratio. BPCL on Wednesday reported a consolidated net loss of ₹1,819.6 crores for the quarter ended March, largely because of inventory loss and a fall in gross refining margin. Lower demand for crude oil and petroleum products has hit prices and therefore refining margins globally. Benchmark Brent future fell a sharp 65% during the March quarter to hit a multi-year low of $22.74 a barrel. BPCL, however, expects fuel demand to return to pre-lockdown levels after the monsoon season.