State-owned Oil and Natural Gas Corp (ONGC) on Thursday reported a near 12 per cent rise in its net profit for the quarter ended June 30, even after its fuel subsidy payout more than doubled.
Net profit in April-June quarter rose 11.9 per cent to Rs 4,095 crore, ONGC Chairman and Managing Director A K Hazarika said.
"Our gross realisation on crude sales was $121.29 per barrel in Q1 but after giving subsidy discounts our net realisation was only $48.76 per barrel, almost the same as the net realisation in the same period last fiscal," he said.
ONGC and other upstream firms make up for at least one-third of the revenues state refiners lose on selling diesel, domestic LPG and kerosene below cost. This assistance is in form of discounts on crude oil ONGC sells to refiners.
In Q1, the fuel subsidy payout stood at Rs 12,046 crore, more than double of Rs 5,515 crore in the same period the previous year, he said.
Hazarika said the increased profitability was due to rise in crude oil output from joint venture projects like Cairn India's Rajasthan fields.
He added that Rs 728 crore came from increased revenue because of increase in output from joint venture fields. Also, higher natural gas price gave Rs 955 crore in additional revenue.
ONGC's crude oil production dropped 2 per cent to 5.933 million tonnes and after including joint venture projects did its output show a 2.3 per cent rise to 6.758 million tonnes.
Natural gas dropped 2.7 per cent to 5.603 billion cubic metres.
ONGC Director (Finance) D K Sarraf said the company paid Rs 546 crore in royalty on behalf of Cairn India on the Rajasthan crude in April-June quarter.
Cairn India holds 70 per cent interest in the Rajasthan oilfields but doesn't pay any royalty. ONGC paid Rs 235 crore on its 30 per cent share and Rs 546 crore on behalf of Cairn India.
Last fiscal, ONGC had paid Rs 1290 crore on behalf of Cairn India.
Revenue in April-June quarter was up 18.7 per cent to Rs 16,268 crore.