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ONGC Q4 net drops 26 % to Rs.2,791 crore

Special Correspondent

NEW DELHI: Oil and Natural Gas Corporation (ONGC) on Monday reported a 26 per cent drop in its fourth quarter net profit on increase in fuel subsidy burden to Rs.2,791 crore from Rs.3,776 crore in the year-ago period, Chairman and Managing Director A. K. Hazarika told reporters here.

ONGC had to pay the highest-ever Rs.24,892 crore 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 Limited (OIL) and GAIL (India) 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 per cent.

“We paid Rs.12,136 crore in fuel subsidy compensation in the fourth quarter as compared to Rs. 4,999 crore in the same period the previous fiscal.

Had the fuel subsidy not increased, our net profit would have been higher by Rs.2,074 crore,” he added.

Mr. Hazarika said ONGC got $108.9 on sale of every barrel of crude oil in the January-March quarter but it had to give a discount of $70.15, taking the net realisation to $38.75 a barrel. For 2010-11, the net profit was up 13 per cent at Rs.18,924 crore against Rs.16,768 crore in 2009-10.

But for the subsidies, ONGC's net profit should have been higher by Rs.14,247 crore in the full fiscal. Its net realisation was $53.77 after giving a discount of $35.64 a barrel.

He said the company's crude oil production was marginally down at 24.42 million tonnes in 2010-11 against 24.67 million tonnes in the previous year. Gas output was almost flat at 23.09 billion cubic metres.

Sales were up 5 per cent in the fourth quarter at Rs.15,554 crore and by 10 per cent in the whole of 2010-11 at Rs.66,152 crore.

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