Exploration company Oil and Natural Gas Corporation on Monday reported a 6.4 per cent drop in net profit in the most recent quarter, hit by subsidized sales to government-run oil marketing companies.
ONGC said its profit in the October-December period, the fiscal’s third quarter, fell to Rs. 4,367 crore from Rs. 4,668 crore in the same period a year ago. The company’s subsidy bill during the period nearly tripled to Rs 6,080 crore.
“The company’s turnover is down 2.56 per cent to Rs. 15,218 crore due to (the) subsidy payout,” Chairman and Managing Director R.S. Sharma said.
In a bid to protect the consumers from rising global crude prices, the government has made state-owned oil companies to subsidize sales. ONGC sells crude at a discount to refiners such as the Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum.
Retail fuel prices have not been revised since July 2006.
ONGC’s subsidy burden during the nine months ended December totaled Rs. 13,528 crore, up from Rs. 12,356 crore in the same period last year.
Net profit during the April-December period totaled Rs 14,075 crore, up 8.6 per cent from a year ago.
Sharma said the company will undertake capital expenditure of Rs. 16,000 crore in the current financial and this would be scaled up to Rs. 18,000 crore in 2008-09. “We plan to put marginal offshore oilfields in operation,” he added.
He said the ‘navratna’ company would be looking at alliances with foreign partners for deep sea projects on offer under the New Exploration Licensing Policy. “We would look for value added support from our prospective partner,” he stated.