ONGC Q3 net profit dips 17.5% to Rs 5,563 crore

State-owned Oil and Natural Gas Corporation (ONGC) on Monday reported 17.5 per cent drop in net profit for its third quarter ended December as crude oil output fell.

Net profit at Rs 5,563 crore during October-December, 2012-13 was lower than Rs 6,741 crore in the year-ago period, ONGC chairman and managing director Sudhir Vasudeva told reporters here.

Vasudeva said the profit in Q3 last year was higher due to Rs 3,142 crore one-time exceptional income from cost recovery being allowed on royalty it paid on Cairn India's Rajasthan oil block.

The benefit of the decision came for the full year in that quarter and if this exceptional item was excluded, the quarter-on-quarter net profit should have been higher by Rs 736 crore, he said.

Also, ONGC's share in fuel subsidy was marginally lower at Rs 12,433 crore as against Rs 12,536 crore in October-December 2011-12.

Upstream firms like ONGC bear a portion of the losses retailers incur on selling diesel, domestic LPG and kerosene at government controlled rates. This they do by selling crude oil at discount to the refiners. ONGC realised $47.97 per barrel after paying a discount out of $110.16 a barrel gross realisation. The net realisation was higher than $ 44.71 a barrel realised in Q3 last year.

Vasudeva said the net profit would have been higher by Rs 7,260 crore if it were not to foot the subsidy bill.

ONGC produced 6.05 million tons of crude oil in the third quarter, 3.02 per cent lower than 6.244 million tons output a year ago. Gas sales was almost unchanged at 5,026 million standard cubic meters while production of value added products was down 1 per cent to 831 kilo tons.

Govt to give Rs 25,000 crore additional fuel subsidy

The government will pay Rs 25,000 crore additional cash subsidy to state-owned fuel retailers to make up for part of the revenue they lost on selling auto and cooking fuel below cost this fiscal.

The finance ministry on February 7 issued a "comfort letter" to Indian Oil Corp (IOC), Bharat Petroleum Corp (BPCL) and Hindustan Petroleum Corp (HPCL) sanctioning Rs 25,000 crore for part of the revenue they lost on selling diesel, domestic LPG and kerosene below cost, official sources said.

Previously, the government had released Rs 30,000 crore subsidy. With the latest sanction it has met about 44 per cent of the Rs 1,24,854 crore revenue the three firms together lost on selling auto and cooking fuel below cost during the April-December period this fiscal.

Of the latest sanction, IOC would get Rs 13,474.56 crore, BPCL Rs 5,987.25 crore and HPCL Rs 5,538.19 crore.

Sources said the comfort letter will allow the oil companies to account as receivables and post decent third quarter earnings. Actual cash will flow only after Parliament approval.

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