HPCL Revises Mumbai Lube Project Cost Downward by Over ₹1,000 Crore.

Hindustan Petroleum Corporation Ltd (HPCL) has revised down the estimated capital expenditure for its Lube Modernisation & Bottom Upgradation Project at the Mumbai Refinery to ₹4,679 crore, even as the state-run oil company reported a loss in the first quarter.

The revised project cost marks a reduction of ₹1,070 crore from the estimate disclosed in the previous quarter. According to HPCL’s Q1 FY27 investor presentation released on July 22, the over 18% reduction brings the project cost back to its earlier baseline estimate after a temporary increase at the end of the previous financial year.

In its Q3 FY26 investor presentation dated January 21, 2026, HPCL had estimated the total project cost at ₹4,679 crore. However, the company raised the projected expenditure to ₹5,749 crore in its fourth-quarter update before revising it back to ₹4,679 crore in the latest presentation.|

Despite the changes in cost estimates, project execution has continued to progress steadily. Physical progress increased from 6.9% in December 2025 to 9.9% in March 2026 and reached 12.3% as of June 30, 2026.

Dhaval Popat, Energy Analyst at Choice Institutional Equities, said the ₹1,070 crore reduction represents a significant financial move that could support HPCL’s near-term liquidity and cash conservation efforts.

"As the refiner moves towards the end of its heavy multi-year investment cycle, the focus is shifting from funding large capital projects to stabilising assets and improving operational efficiency. The cost reduction appears to be a tactical re-baselining of contingency buffers rather than a reflection of any slowdown in physical progress," Popat said.

HPCL officials did not respond to queries regarding the reasons behind the more than ₹1,000 crore downward revision in the capital expenditure estimate for the Mumbai Refinery modernisation project.