Hindustan Petroleum (HPCL) on Tuesday joined a parade of state-run oil refiners showing handsome profits after stellar shows by Indian Oil and Bharat Petroleum, with profits for 2011-12 comfortably exceeding expectations.
But that was aided by government subsidies and government-inspired discounts from oil producers ONGC and OIL.HPCL's net profit for the January-March fourth quarter jumped 312% to Rs. 4,631 crore from Rs. 1,123 crore a year ago. Thus all oil marketers exccelled despite a falling rupee and higher global crude prices.
Oil and Natural Gas Corp (ONGC) showed a 102% jump in net profit for the January-March quarter at Rs. 5,644 crore. But this figure would have been higher if it was allowed to sell at global prices instead of offering forced discounts.
"ONGC realised Rs. 2,229 per barrel as against the pre-discount average rate of crude oil of Rs. 6,117 per barrel during the fourth quarter of 2011-12," the chairman and managing director of ONGC, Sudhir Vasudeva told a news conference.
That, in fact, is much lower than the Rs. 3,888 a barrel discount that it offered to the refiners.
ONGC's net profits for 2011-12 stood at Rs. 25,123 crore as against Rs. 18,924 crore — 33% up.
In addition to a cash assistance from the government of Rs. 45,000 crore for the first three quarters of 2011-12 and another Rs. 38,500 crore during the fourth, ONGC, Oil India and GAIL India were asked to give discounts that added up to around Rs. 52,500 crore. GAIL will announce its results on Wednesday.
In dollar terms, as against the average rate of $117.40 a barrel that ONGC could have realized in 2011-12, what it got was actually $62.69 per barrel as it was asked by the government to dole out a $77.32 discount a barrel.