Led by a higher subsidy outgo of Rs. 12,330 crore to sister oil marketing PSUs, India's largest public sector oil company Oil and Natural Gas Corporation (ONGC) on Thursday announced a 32% year-on-year fall in its net profit at Rs. 5,897 crore during the July-September quarter against Rs. 8,642 crore a year ago.
The higher subsidy outgo hit ONGC's profit after tax by Rs. 7,103 crore during the second quarter.
Despite the high per barrel crude oil price of $109.9 during the quarter, ONGC's net realisation was only $46.8 per barrel. It gave discounts of $63.1 per barrel to the three fuel retailers -IOC, BPCL and HPCL.
Chairman Sudhir Vasudeva attributed the prfit fall to higher subsidy outgo, which he said has been flagged by him at the highest level in the government including the Prime Minister's Office and the Cabinet secretary.
Vasudeva said if ONGC continued to pay higher subsidy, its cash reserve, that stood at Rs. 12,000 crore would drop to Rs. 4,500 crore by the end of 2012-13.