ONGC Q1 net jumps 14% to Rs 5,460 crore on lower fuel subsidy

State-owned Oil and Natural Gas Corp (ONGC) on Thursday reported over 14% jump in its June quarter net profit as its fuel subsidy outgo reduced and oil output rose.

Net profit in April-June period at Rs 5,460 crore was up 14.2% from Rs 4,782 crore in the year ago quarter.

"Oil production had been a matter of concern. But we have been able to arrest the decline in the previous quarter and in April-June it infact rose 2.2% to 5.227 million tonnes," ONGC Chairman and Managing Director D K Sarraf said.

Gas output however dipped 3% to 5.482 billion cubic metres. "We are addressing that as well and hopefully you will have some positive news by the fourth quarter," he said.

The major gain came from the reduction in its fuel subsidy outgo, which at Rs 1,133 crore in Q1 were less than Rs 13,200 crore in the same period a year ago.

Upstream firms like ONGC bear a part of the losses that retailers suffer on selling kerosene at government controlled rates. This is in form of discount on crude oil they sell to refiners.

He said ONGC got a net of $58.92 per barrel in Q1 after giving a discount of $4.88 a barrel. This compared to net realisation of $47.15 per barrel in April-June of 2014 out of a gross realisation of $109.48 a barrel.

The subsidy payout led to net profit being lower by Rs 628 crore, he said.

The subsidy payout in Q1 of last fiscal had led to profit being lower by Rs 7,396 crore.

Revenue was up 4.3% at Rs 22,868 crore during April-June 2015.