ONGC Q1 net profit slumps 34 pc to Rs 4,016 crore, misses estimates

NEW DELHI: State-run Oil & Natural Gas Corp ( ONGC), India's biggest energy explorer, has reported 34% decline in its net profit at Rs 4,016 crore in the first quarter of current year after paying Rs 12,622 crore compensation to state refiners for selling fuels below market rates.

"Subsidy burden is a major concern," ONGC Chairman & Managing Director Sudhir Vasudeva said. The company announced its first quarter performance on Monday.

The company would have made an additional net profit of Rs 7,131 crore, had it not paid the discount to state refiners ONGC Director Finance AK Banerjee said. ONGC sells crude oil to state refineries at a discount, which is determined by the government on an ad-hoc basis.

ONGC's gross realisation for selling one barrel of crude oil was $102.90, but after discounts the net realisation was $40.17 per barrel.

Last year the company's gross realisation in the first quarter was $109.18 per barrel, although its net realisation was $45.91 per barrel. The company had posted Rs 6,078 crore net profit in the first quarter previous year after giving Rs 12,346 crore discounts to refiners.