Oil and Natural Gas Corporation (ONGC) has reported a 50 per cent year-on-year drop in its net profit for the third quarter of fiscal 2014-15 as it suffered from dropping crude oil prices. The company’s net profit dropped to Rs 3,571.20 crore against Rs 7,125.90 crore in the same quarter last year.
The company said the profit drop was mainly due to the discounts offered to public sector oil refining and marketing companies. Public sector oil exploration and production companies ONGC and Oil India offer discounts to partly offset the losses suffered by IndianOil, HPCL and BPCL for selling sensitive products at below market rates.
“The company has shared the under-recoveries of oil marking companies for the nine months and quarter ended December by allowing discount on the price of crude oil,” ONGC said in a statement to the BSE.
Due to the discounts, the company’s net profit for the quarter was lower by Rs 5,386 crore.
During the quarter, ONGC's net revenue was 9.2 per cent lower at Rs 18,924 crore against Rs 20,852 crore in the same quarter last year. The revenues were lower by Rs 9,458 crore due to the discounts offered to IndianOil, HPCL and BPCL.