Oil India reports 96 per cent drop in the fourth-quarter profit

NEW DELHI: State-run Oil India has reported a 96 per cent drop in the fourth-quarter profit, hurt by the payment of one-time differential royalty on crude oil to state governments.

Profit fell to Rs 19 crore in the Jan-March quarter from Rs 470 crore in the year-ago period. Turnover rose to Rs 2512 crore from Rs 2009 crore.

Payment of differential royalty of Rs 1,152 crore to governments of Assam and Arunachal Pradesh and reduction in price of natural gas led to decline in profit, Oil India Chairman Utpal Bora said.

The current natural gas price is $2.48/unit, which is almost equal to Oil India’s cost of producing gas, Bora said.

The company expects stranded input tax credit of Rs 175 crore because of the rollout of Goods and Services Tax from July 1, Bora said.

Oil India is likely to complete the process of buying back 4.49 crore shares, or 5.6% of its paid up equity shares, in June. The buyback will cost Rs 1500 crore, Bora said. The company has a cash reserve of Rs 6,300 crore and consolidated debt of Rs 14,000 crore.