State-owned Oil and Natural Gas Corp (ONGC) on Saturday reported halving of its net profit in the December quarter after being forced to pay fuel subsidises despite plummeting oil prices.
Net profit at Rs 3,571.20 crore, or Rs 4.17 per share, in October-December quarter was half of Rs 7,125.97 crore net profit, or Rs 8.33 a share, in the same period of the previous fiscal, the company said.
ONGC shelled out Rs 9,458 crore in fuel subsidy during the quarter when its average crude oil price realisation fell to $76 per barrel from $108.19 in October-December 2013.
The subsidy payment was in form of discount on crude oil it sold to refiners and its net realisation after the payout was $35.57 per barrel. The subsidy discount was $40.43 per barrel.
In third quarter of the previous fiscal, the company’s net realisation was $45.99 per barrel after payout of $62.20 discount. Fuel retailers like IOC, BPCL and HPCL sell domestic LPG and kerosene through PDS at government-controlled rates which are way below the cost. The loss they thus incur are made good by way of subsidy from the Budget and assistance from upstream firms.