State-owned Oil and Natural Gas Corporation (ONGC) on Tuesday reported a 102% jump in net profits for the fourth quarter of 2011-12 at Rs 5,644 crore as a large part of its oil subsidy liability to retailers like IOC had been paid in previous quarters,unlike the last quarter of the previous fiscal,during which it had bunched up.
ONGC’s turnover for the quarter rose 22% to Rs 18,976 crore from the same time a year ago. Net profit for the whole fiscal jumped 33% to Rs 25,123 crore on a record turnover of Rs 66,152 crore,which was a 15% improvement from a year ago.
ONGC Chairman Sudhir Vasudeva told reporters that despite crude oil price fetching $121.6 in world markets,the company could realise only $50.29 a barrel in the fourth quarter of 2011-12 and $47.95 in the whole fiscal due to the subsidy burden. ONGC paid the highest ever discount to retailers IOC,HPCL and BPCL at Rs 44,466 crore in 2011-12,which was 79% more than what it gave the previous year. That adversely impacted the exploration major’s profit after tax to the tune of Rs 25,535 crore. In the fourth quarter of 2011-12,the company paid Rs 14,170 crore subsidy compared to Rs 12,136 crore in the corresponding period a year ago.
Our cost of crude oil production is $44 a barrel with the increase in the cess on the commodity. With the post discount rate of $44.32 a barrel,we are just breaking even, Vasudeva said. He said that such subsidy assistance to retailers for keeping consumer prices low has eaten into the company’s resources for buying natural resource assets abroad.
ONGC Director (Finance) A K Banerjee said that with the depreciation of the domestic currency by every rupee,the positive impact on turnover is Rs 1,600 crore. But the company does not entirely benefit from this as most of the benefit from high global crude price and the currency depreciation is passed on to retailers as discounts to protect consumers. The board of directors approved an extra 40% dividend,that takes the entire fiscal’s pay out to Rs 8,342 crore. (ends)
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