GAIL net dips on lower gas volume, liquid gas margins

The net profit fell despite its outgo on fuel subisidy remaining unchanged at Rs 700 crore

GAIL, the nation’s largest gas transmission and marketing company, on Thursday reported a 29 per cent drop in first quarter net profit as it transported less gas and its LPG margins shrunk on drying up of supplies from Reliance Industries’ KG-D6 gas fields.      

Net profit in the April-June quarter at Rs 808 crore was 28.7 per cent lower than Rs 1,134 crore in the same period a year ago, Chairman and Managing Director B C Tripathi said. GAIL transported 99 million standard cubic metres (mscmd) a day of gas during April-June, down from 110 mscmd a year ago.

 

Its trading volumes fell after BG Group-operated Panna/Mukta and Tapti fields in western offshore saw production drop to 6.9 mscmd from 10.3 mscmd. More important, KG-D6 gas supplies to its LPG plants dried as output at the eastern offshore gas fields fell to an all-time low of 14 mscmd.      

Also, the firm’s outgo on fuel subsidy remained unchanged at Rs 700 crore despite the company not getting any of the cheaper KG-D6 gas for LPG production. Upstream firms like Oil and Natural Gas Corporation and GAIL make up for at least one-third of the revenues that retailers lose on selling auto and cooking fuel at government controlled rates, way below market cost. Sales rose 16 per cent to Rs 12,856 crore. While profit from natural gas transmission was marginally down to Rs 553.83 crore, the same from natural gas trading fell to Rs 302.53 crore, from Rs 495.64 crore in the first quarter last financial year. LPG and liquid hydrocarbons segment recorded a loss before interest and tax of Rs 10.9 crore as against a profit before interest and tax of Rs 437.3 crore in the year-ago period.