The recent incident involving chloride contamination in crude oil proved to be less severe than first anticipated, with its impact successfully contained, according to Vikas Kaushal, Hindustan Petroleum’s Chairman and Managing Director (CMD). He delivered this reassuring update during an investor call on Friday, October 31, 2025.
Addressing investors after the company’s second-quarter results, Mr. Kaushal confirmed that the section of the Mumbai refinery that had been temporarily shut down due to the contaminated fuel is now entirely operational. “The good news is that we are almost through with that, except dealing with some of the contaminated products,” he stated, emphasizing that “as of last night, the unit which was down is fully back and now we are ramping up to full capacity.”
Earlier in the week, the state-owned refiner had disclosed that a crude oil consignment from a supplier, Hindustan Oil Exploration Company, contained “very high salt and chloride content.” This contamination led to operational challenges during processing, including corrosion in downstream units and suboptimal output at their Mumbai refineries. The supplier had previously indicated they were investigating the claims and were in discussions with HPCL.
‘Impact can be absorbed’
Mr. Kaushal reiterated that the overall impact of the contamination was “manageable.”
He further elaborated on the financial implications, noting that the refiner had a “bad product,” primarily naphtha, amounting to approximately 100 thousand metric tonnes (TMT). “We had no option but to export it at a discount that knocked us by about ₹150 crores,” he explained. Additionally, the CMD mentioned a temporary deferral of revenues as one of the final finishing units was offline, leading to a hold on semi-processed products. These revenues are expected to be realized next month.
Mr. Kaushal also shared that there is still some leftover contaminated crude that the refiner is working to dispose of. “As and when it is done, there would be some more impact, but we do not expect it to be massive,” he assured. Concluding his remarks, the senior executive affirmed that despite some “extra movement” required due to the unit shutdown, the company is confident in keeping the total financial impact within the estimated ₹150 crores. “As a management team, we are very comfortable at being able to mitigate the financial impact of it,” he stated, highlighting the company’s confidence in handling the situation.