ONGC Q4 net slips as subsidy outgo surges

Public sector oil major Oil and Natural Gas Corp today reported a marginal dip in its net profit for the fourth quarter of 2007-08 fiscal as its subsidy outgo almost doubled.

Public sector oil major Oil and Natural Gas Corp (ONGC) today reported a marginal dip in its net profit for the fourth quarter of 2007-08 fiscal as its subsidy outgo almost doubled.

ONGC posted a net profit of Rs 2,627.10 crore for January-March period, a 2 per cent decline over Rs 2,681.64 crore net profit for the same period of the previous fiscal, company chairman and managing sirector R S Sharma told reporters here. The company, which sells crude oil at a discount to refiners Indian Oil, Bharat Petroleum and Hindustan Petroleum to enable them to sell petrol, diesel, domestic LPG and kerosene at subsidised rates, saw its subsidy burden increase to Rs 8,472 crore in the fourth quarter of fiscal 2007-08 from Rs 4,668 crore in the same period a year ago. Sharma said the for full year ONGC’s subsidy burden was Rs 22,001 crore, against Rs 17,024 crore of 2006-07. For current fiscal, he estimated that the company’s outgo would jump to about Rs 38,000 crore as crude prices have risen to all-time high.

The retailers IOC, BPCL and HPCL faced a Rs 2,45,000 crore deficit on fuel sales before the June 4 hike in prices of petrol, diesel and domestic LPG along with customs and excise duty cuts. They are to receive Rs 94,000 crore oil bonds to partly compensate them for losses on fuel sales and have proposed to pay ONGC for crude they buy in the bonds.

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“There is no question of ONGC accepting bonds as the mode of payment. We pay in cash for services and we need cash,” Sharma said. ONGC Director (Finance) D K Sarraf said the company gave a discount of 50.71 dollars per barrel in the Q4 on a gross realisation of 103.37 dollars a barrel. In rupee term, the net realisation was Rs 1,977 per barrel.

For 2007-08 fiscal, ONGC gave IOC, BPCL and HPCL a discount of 40.26 dollars per barrel and its net realisation was 52.90 dollars a barrel. In rupee term, the realisation was Rs 2,130 per barrel, up 6 per cent from Rs 2,001 of 2006-07.

Yet it’s top taxpayer

Even as oil marketing companies are reporting losses on rising crude oil prices, state-owned oil producer ONGC has emerged as the largest taxpayer in the country by paying as much as Rs 1,333 crore advance tax for the first quarter this year. The oil major had paid Rs 1,010 crore as advance tax during the same period last fiscal.

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