Even as its net profit for 2010-11 rose 13%, state-run gas utility GAIL India Ltd on Monday reported a drop in the fourth quarter net profit for the first time in six quarters after the government asked the company to bear a higher share of fuel subsidy bill.
GAIL’s net profit dipped to Rs 783 crore in the quarter ended March 31 from Rs 911 crore in the same period a year ago, B C Tripathi, chairman and managing director, GAIL told reporters at a press conference.
“Our subsidy outgo went up from Rs 330 crore (in Q4 of 2009-10) to Rs 902 crore in Q4 of 2010-11 fiscal,” he said. “This is the highest ever subsidy paid by GAIL in any quarter.”
Upstream firms Oil and Natural Gas Corp (ONGC), GAIL and Oil India Ltd are required by the government to share a part of the revenue loss incurred by fuel retailers on selling diesel, domestic LPG and kerosene below cost. Their share of fuel subsidy increased to 38.8% in 2010-11 from previous 33.3%.
Tripathi said GAIL net profit was up 13% in 2010-11 to Rs 3,541 crore. “If our subsidy burden would have remained at previous year (2009-10) levels, net profit would have been risen 25% or by another Rs 500 crore.”
In 2010-11, GAIL’s total subsidy payout was Rs 2,111 crore as opposed to Rs 1,327 crore in the previous year.
GAIL’s revenues were up by 36% to Rs 8,894 crore in the January-March quarter.
The company plans to invest Rs 7,692 crore during the current fiscal.
It will borrow Rs 3,325 crore including a $150 million from Bank of Tokyo, he said.