State-owned Oil and Natural Gas Corporation (ONGC) today reported 26% drop in its quarterly consolidated net profit on increase in fuel subsidy burden.
Consolidated net profit in January-March dropped 26% to Rs 2,791 crore, from Rs 3,776 crore in the same period a year ago, ONGC Chairman and Managing Director AK Hazarika told reporters here.
ONGC had to pay the highest ever Rs 24,892 crore, half of it in Q4, in fuel subsidy by way of discounts on crude oil it sells to state-owned refiners.
Till last year, ONGC and other upstream firms Oil India and GAIL met one-third of the loss retailers incurred on selling diesel, domestic LPG and kerosene at government controlled rates but in 2010-11 fiscal the sharing has gone up to 38.8%.
"We paid Rs 12,136 crore in fuel subsidy compensation in Q4 compared to Rs 4,999 crore in the same period the previous fiscal," he said.
Had the fuel subsidy not increased, net profit would have been higher by Rs 2,074 crore.
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Hazarika said ONGC got $108.9 on sale of every barrel of crude oil in January-March quarter but it had to give a discount of $70.15 per barrel, taking the net realisation to $38.75 per barrel.
For FY11, net profit was up 13% to Rs 18,924 crore from Rs 16,768 crore in FY10.
But for the subsidies, ONGC's net profit should have been higher by Rs 14,247 crore in the full fiscal.
In the full fiscal, ONGC's net realisation was $53.77 per barrel after giving a discount of $35.64 per barrel.
Hazarika said the company's crude oil production was marginally down at 24.42 million tonne in 2010-11 from 24.67 million tonne in the previous year. Gas output was almost flat at 23.09 billion cubic metre.
Sales were up 5% in Q4 to Rs 15,554 crore and by 10% in full fiscal 2010-11 to Rs 66,152 crore.