ONGC Q4 Net up 12pc to Rs 4,416-cr

State-owned Oil and Natural Gas Corp (ONGC) today reported a 12 per cent rise in its March quarter net profit after the government exempted it from payment of fuel subsidy.
Net profit of Rs 4,416 crore in January-March was 12.2 per cent higher than Rs 3,935 crore net profit in the same period a year ago, ONGC said in a statement here.
Profit rose despite crude oil production falling by 1.7 per cent to 6.34 million tons. Gas output also dropped by nearly 10 per cent to 5.24 billion cubic meters.
The Oil Industry (Development) Act, 1974 provides for
collection of cess as a duty of excise on indigenous crude oil.

This cess is a production cess which is not a pass-through and has to be borne by the oil producers.

This cess on crude oil moved to a refinery was levied at Rs 60 per tonne in July 1974 and subsequently revised from time to time.
During 2005-06, when the crude oil prices had increased from an average of USD 40 per barrel to USD 60 per barrel, OID cess was increased from Rs 1,800 to Rs 2500 per tonne from March 1, 2006.
Again, when the crude oil prices increased to over USD 100 per barrel, the rate of cess was increased by government to Rs 4,500 per tonne (USD 10 per barrel) from March 17, 2012 in the Union Budget 2012-13.