State-run Hindustan Petroleum Corp Ltd (HPCL) on Wednesday posted an 86 jump in first-quarter profit, boosted by strong refining margins.

MK Surana, chairman & managing director of HPCL, spoke to CNBC-TV18 about the quarterly performance and the outlook.

Surana expects gross refining margins in the range of $6 -6.5 per barrel going forward.

Talking about the impact of the IMO regulation where bunkers fuels will have to use lower Sulphur content, he said, "Indian refineries are mostly in diesel maximization mode – the configuration of refineries are such that they are designed to produce more diesel."

“One perception is that when superior specifications are imposed on fuel oil, people may not invest money on improving quality of fuel because fuel oil is below crude price product and so light diesel oil (LDO) demand could go up,” said Surana adding that if that happens the cracks on diesel should improve and that would benefit the Indian refiners.

Talking about the capex plan, he said,"For FY19 it would be around Rs 8400 crore as two refineries are under expansion mode."

The company is still in discussion with ONGC with regards to MRPL merger, he said.