ONGC Q2 Results: Net Profit Declines 30 Per Cent As Govt Levies Windfall Tax

ONGC reported a net profit of Rs 12,825.99 crore in July-September 2022-23 compared with Rs 18,347.73 crore in the same period a year ago

Oil and Natural Gas Corporation (ONGC) reported a 30 per cent fall in net profits in the second quarter as the government brought windfall taxes on the profits arising from a surge in international energy prices. India’s top oil and gas producer in a statement said that the company saw a net profit of Rs 12,825.99 crore in July-September 2022-23 compared with Rs 18,347.73 crore in the same period a year ago.

Although, the company’s gross billing for crude oil it produced soared 37.7 per cent to $95.49 per barrel in July-September from $69.36 a barrel a year back.
 
Previously, ONGC had reported a 15.6 per cent fall in net profit in the June quarter when profits stood at Rs 15,205.85 crore. 

State-owned ONGC refines petrol, diesel, and other petroleum products and sells them at international benchmark rates which soared following the Russian invasion of Ukraine. However, on July 1, the government brought a new tax to take away gains from the global energy price surge. These taxes were as high as $40 per barrel and were adjusted every 15 days in step with changes in global oil prices.

ONGC Director (Finance) Pomila Jaspal said that the firm paid Rs 6,400 crore as special additional excise duty (SAED) in the quarter. The mechanism to levy windfall profit tax ensures that the company gets $75-76 per barrel realisation, she added.

ONGC got a higher $6.10 per million British thermal unit price for natural gas it produced in July-September as compared to $1.79 a year back. Revenue from operation was up 57.4 per cent to Rs 38,321 crore.

The ONGC board approved an interim dividend of 135 per cent, or Rs 6.75 on each equity share of Rs 5. The total payout will be Rs 8,492 crore, the majority of it going to the government, which owns almost 59 per cent shares of ONGC.

Oil production of 5.36 million tonnes in the September quarter a 2 per cent drop in production compared to a year ago. Similarly, gas production of 5.35 billion cubic meters in Q2 is compared with 5.46 billion cubic meters output in July-September 2021. The firm said it has made six discoveries in the KG basin acreage it holds during the current fiscal year.