State-owned Oil and Natural Gas Corporation (ONGC) today reported a 24.5 per cent decline in its net profit at Rs 3,661.14 crore for the quarter ended June 30, as its fuel subsidy payout jumped nearly 12-folds.

The company had reported a net profit of Rs 4,847.92 crore in the same period previous fiscal.

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Upstream firms like ONGC and OIL meet one-third of the revenue retailers lose on selling petrol, diesel, domestic LPG and PDS kerosene below cost. They extend discounts on crude oil and LPG they sell to Indian Oil, Bharat Petroleum and Hindustan Petroleum to subsidies fuel.

The company had in whole of 2009-10 fiscal paid Rs 11,554 crore fuel subsidy.

ONGC sold crude oil at $80.80 per barrel but its net realisation after subsidy discount was $48.04 per barrel, Sharma said. The company had got $58.25 a barrel in Q1 last fiscal after giving a discount of $2.33 per barrel.

But for the subsidy payout, net profit would have been Rs 3,119 crore higher.

Sharma said coming quarters would be better as the company would be able to realise higher price for gas.

The government has raised natural gas price from $1.79 per mmBtu to $4.2 per mmBtu but ONGC got additional revenues for only a month as the new price was effective June 1.

"Revenues because of higher gas price were Rs 539 crore for a month. For full quarter, the revenues would be higher by Rs 1,500-1,600 crore and in full year bottomline will increase by Rs 800-900 crore," he said.

Earnings were lower by Rs 862 crore because of foreign exchange variation. "Rupee was at Rs 48.67 to a dollar in April-June last fiscal and this year it was Rs 45.67 to a dollar, a loss of Rs 3," ONGC Director (Finance) D K Saraf said.

Crude oil production was almost unchanged at 6.02 million tonnes in April-June quarter while natural gas too was flat at 5.76 billion cubic meters.

Total income declined to Rs 14,230.22 crore for the quarter ended June 2010, from Rs 15,924 crore in the same period corresponding fiscal.

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