New Delhi: India’s largest oil and gas explorer, Oil and Natural Gas Corp. Ltd (ONGC), said net profit fell 5.7% in the second quarter as the company’s share in subsidizing the sale of fuel below cost swelled as much as 233% to Rs12,663 crore.

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94e12c6e-a69b-11dd-9402-000b5dabf613.flvNet profit in the three months ended 30 September fell to Rs4,808 crore from Rs5,098 crore in the same period last year, the state-owned explorer said. Turnover rose 13% to Rs17,492 crore from Rs15,464 crore a year earlier. “There is a huge aberration for the second quarter for the subsidy burden, which puts a larger question mark... but for the subsidy discount, our net profit would have been higher by Rs7,066 crore," said chairman and managing director R.S. Sharma. “We have been resenting the ad-hoc system of subsidy-sharing. This ad-hocism should be done away with."

Profits hurt: R.S. Sharma, chairman of ONGC. Harikrishna Katragadda / Mint

State-owned petroleum refiner and marketer Bharat Petroleum Corp. Ltd (BPCL) posted a net loss of Rs2,625.27 crore for the three months to September, swinging from a net profit of Rs1,038.16 crore in the year-ago period. This was due to high crude prices during the quarter and the firm’s inability to pass on the cost to consumers because of sales at government mandated rates.

BPCL registered a forex loss of Rs1,141.87 crore. Its revenue rose 49.32% to Rs38,148.73 crore for the quarter, from Rs25,548.14 crore in the year-ago period.

Government-owned oil marketers are losing Rs15.34 crore daily (at Wednesday’s crude price of $58.93 per barrel in the Indian energy basket) on account of selling transport and cooking fuels below cost. The marketers would break even at $57 per barrel, according to a petroleum ministry official who declined to be named.

(PTI and Bloomberg contributed to the story.)