ONGC net drops 24% to Rs 3,661 cr

State-owned Oil and Natural Gas Corp (ONGC) on Thursday reported a 24.5 per cent fall in net profit, at Rs 3,661.14 crore, for the quarter ended June 30, as its fuel subsidy payout jumped nearly 12-fold. The company had reported net profit of Rs 4,847.92 crore in the corresponding period last financial year.

“We paid Rs 5,515 crore towards fuel subsidies in the April-June quarter, against Rs 429 crore in the year-ago period,” ONGC CMD R S Sharma said.

Upstream firms like ONGC and OIL meet a third of their revenue by selling petrol, diesel, domestic LPG and PDS kerosene, below cost. They extend discounts on crude oil and LPG to Indian Oil, Bharat Petroleum and Hindustan Petroleum to subsidise fuel.

The company paid Rs 11,554 crore fuel subsidy throughout 2009-10.

ONGC sold crude oil at $80.80 (Rs 3,760) a barrel, but its net realisation after subsidy discount was $48.04 (Rs 2,235) per barrel, Sharma said.

But for the subsidy payout, net profit would have been higher by Rs 3,119 crore.

Sharma said the coming quarters would be better as the company will be able to realise a higher price for gas.