Ahead of its follow-on public offer (FPO) scheduled on July 5, India's largest oil and gas exploration company the Oil & Natural Gas Corp (ONGC) has recorded a 26% year-on-year drop in its net profit in the fourth quarter of 2010-11.
Attributing the decline to the government's decision of asking the company to pay more for sharing the subsidies of state-owned oil marketing firms, ONGC said on Monday that its net income in the three months ended March 31 fell to Rs 2,791 crore from Rs 3,776 crore in the corresponding period last fiscal.
Company's chairman and managing director AK Hazarika said ONGC was asked to pay subsidy of Rs 24,892 crore during 2010-11 as against Rs 11,554 crore in the previous year. "We paid Rs 12,136 crore in fuel subsidy compensation in Q4 compared to Rs 4,999 crore in the same period in the previous fiscal," he said.
The government had increased the share of subsidy for upstream companies including ONGC to 38.8% of the total from 33% in the last fiscal year due to high global oil prices that rose 20% in the quarter.