LPG, kerosene subsidy pulls down ONGC net

LPG and kerosene subsidies have pulled down ONGC’s net for the year 2003-04. Net profit of the oil PSU fell 17.7 per cent to Rs 8,664 c...

LPG and kerosene subsidies have pulled down ONGC’s net for the year 2003-04. Net profit of the oil PSU fell 17.7 per cent to Rs 8,664 crore as opposed to Rs 10,529 crore in the previous year. Revenue fell 6.8 per cent to Rs 32,180 crore compared with Rs 34,537 crore in 2002-03.

Talking to the media, ONGC CMD Subir Raha said ‘‘profit was lower because of subsidy of Rs 2,690 crore paid to IOC, BPCL and HPC.’’ The government had last year asked upstream companies such as ONGC and GAIL to share with downstream marketing firms — IOC, HPCL and BPCL — the losses on LPG and kerosene arising out of its decree not to increase prices, despite rising crude oil prices and cut in state subsidy.

Raha said profits were also down because the appreciation in the rupee value vis-a-vis dollar. This eroded the gains for ONGC from selling crude oil, which it produces, at a higher price of $29.95 a barrel in 2003-04 as against $28.5 a barrel in 2002-03.

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The ONGC board declared a total dividend of Rs 24 per share, inclusive of a Rs 14 as interim dividend.

While ONGC crude production remained almost the same at 26 million tonnes in 2003-04, the revenue from crude sale fell to Rs 22,536 crore from Rs 24,764 crore in 2002-03.

‘‘Besides the Rs 2,690 crore outgo to the refiners for LPG and kerosene subsidy, we also pay Rs 250 crore a year to gas pool account and Rs 800 crore to private and foreign explorers for difference between the artificially low domestic gas price and the market price,’’ Raha said.

Raha said the ONGC group, comprising ONGC and its subsidiaries ONGC Videsh and Mangalore Refinery and Petrochemical Ltd, posted a consolidated net profit of Rs 9380.26 crore for the year ended March 31, 2004.