ONGC Q2 net profit down 32%, biggest in 4 years
Net profit dropped 31.8 per cent to Rs 5,897 crore, or Rs 6.89 rupees a share, in July-September as compared to Rs 8,642 crore a year earlier, ONGC Chairman and Managing Director Sudhir Vasudeva told reporters here.
"The single reason for this was jump in our subsidy outgo - from Rs 5,713 crore in Q2 of last fiscal to Rs 12,330 crore this year," he said.
Upstream firms like ONGC bear a part of the revenues that fuel retailers lose on selling diesel and cooking fuel at government controlled prices. The subsidy is paid by way of discounts on crude oil they sell to refiners.
ONGC's gross realisation in July-September was USD 109.85 for every barrel of crude oil but it had to give a discount of USD 63.05 a barrel, leading to a net realisation of USD 46.8 per barrel.
The net realisation is lower than USD 56 per barrel that the oil ministry had promised the company to help it sustain its operations.
"This is certainly worrying. Our cost of production is going up and any realisation less than USD 60 per barrel is not sustainable for us," he said. "If the trend (of USD 46 per barrel net realisation continues) we will have to dip into our cash reserves to meet
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