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Updated: August 12, 2013 22:37 IST

Subsidy burden pulls down ONGC profit in first quarter

Special Correspondent
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A. K. Banerjee
The Hindu A. K. Banerjee

Pulled down heavy burden of fuel subsidy payout, Oil and Natural Gas Corporation (ONGC) on Monday posted a 34 per cent drop net profit during the June quarter.

Talking to newsmen here, ONGC Director (Finance), A. K. Banerjee, said the net profit in April-June fell 33.9per cent to Rs.4,015.98 crore from Rs.6,077.70 crore in the same period a year ago. The company paid 2.2 per cent more subsidy at Rs.12,622 crore in April-June despite fuel retailer’s revenue losses on diesel, cooking gas (LPG) and kerosene declining by 43 per cent to Rs.25,579 crore. The subsidy payout was Rs.12,346 crore in the year-ago period.

Mr. Banerjee said the subsidy payout impacted net profit by Rs.7,131 crore which otherwise would have been invested in exploring more oil and gas within the country and acquiring assets abroad. ONGC’s net cash declined 16 per cent to Rs.13,200 crore on March 31 from Rs.15,500 crore on April 1, 2012. This is likely to drop further as the company continues to sell crude at a discount and has set aside Rs.1,100 crore for workers’ retirement benefits. The profits were also lower because of the one-time charge towards employee pension benefits.

The turnover was marginally lower at Rs.19,308.93 crore against Rs.20,177.78 crore.

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