Fuel subsidy has taken a toll on Oil and Natural Gas Corporation of India’s (ONGC).
Net profit for the fourth quarter of 2010-11, declined 26% from the same time a year ago to R2,791 crore, ONGC CMD A K Hazarika said here.
ONGC gives discounts on its crude oil sold to fuel retailers IOC, HPCL and BPCL at international prices. The government also bears a part of the required subsidy by giving retailers cash assistance. In the fourth quarter under review, ONGC gave a discount of R 12,136 crore to retailers, which is two and a half times the assistance given same quarter a year ago. In the financial year ’10-11, ONGC gave a discount of R 24,892 crore, double the subsidy given a year ago. Had the fuel subsidy not increased, net profit would have been higher by R2,074 crore in the fourth quarter of 2010-11, he said.
ONGC, however, reported a 13% jump in net profit for the 2010-11 fiscal to R18,924 crore. ?Receipts from the oil pool account and the increase in administered natural gas price to $4.2 million metric British thermal unit (mmBtu) from last June has helped to realise higher net profit in the fiscal,? ONGC’s director (offshore) Sudhir Vasudeva said.
Sales income jumped 5% in the quarter under review to R15,554 crore from the same time a year ago. In 2010-11, sales jumped 10% to R66,152 crore.
Hazarika said that it is for the government to decide on the size of the proposed follow on public offer depending on the amount it wants to raise. ONGC is prepared to launch the FPO in the second week of July, Hazarika said. The government had planned to sell 5% of its stake in the company to raise about R 12,000 crore.
Till last year, ONGC, Oil India and Gail India met a third of the loss retailers incurred on selling the subsidised fuels?? diesel, domestic LPG and kerosene?at government controlled rates but in the financial year 2010-11, the sharing increased to 38.8%.