ONGC Q1 profit rises 58% to ₹6,144 crore, misses estimates
ONGC profit on a standalone basis rose 58% to ₹6,144 crore for the quarter ended 30 June, helped by higher domestic gas prices
New Delhi: State-owned ONGC on Thursday reported its highest quarterly net profit in over four-and-a-half-years on sharp rise in prices for oil and gas it produced.
Its net profit of ₹6,143.88 crore in the first quarter of the 2018-19 fiscal was 58.1% higher than ₹3,884.73 crore in the year-ago period, Oil and Natural Gas Corp (ONGC) said in a statement here. The net profit is highest since December 2013 when earnings had hit ₹7,126 crore.
ONGC realised $71.48 for every barrel of crude oil it produced in the April-June quarter of the current fiscal, up 47.6% over $48.42 a barrel in the year-ago period.
For natural gas, it got ₹3.06 per million British thermal unit as compared to ₹2.48 per mmBtu. ONGC said its crude oil production dropped 5.3% to 5 million tonnes in the quarter. This was partly made up by a 2.5% rise in output from joint venture fields, that pumped 0.8 million tonnes oil.
Natural gas production was however 3.4% higher at 5.9 billion cubic metres. Its revenue from operations rose 42.7% to ₹27,212.83 crore for the quarter under review.
The country’s largest oil and gas producer said it deposited ₹2,695 crore service tax and GST under protest as it believes such taxes are not applicable on royalty paid by the firm to the government.
Oil producers like ONGC are required to pay 12.5% royalty on crude oil to the state governments for on-land areas and at 10% to the central government for shallow water areas. The tax department is seeking payment of service tax on these royalty payments.
“In the year 2017-18, the company had received show-cause notices at various work centres on account of service tax along with interest and penalty, on royalty on crude oil and natural gas levied under Oil Field (Regulation & Development) Act, 1948,” ONGC said.
ONGC said it had worked out service tax for the period from 1 April 2016 to 30 June 2017 along with interest of ₹2,294 crore. Further, GST along with interest thereon has been worked out of ₹1,608 crore.
“Based on legal opinion obtained by the company, service tax/GST on royalty is not applicable. The company is contesting the same at appropriate authorities and accordingly the same is considered as a contingent liability. However, as an abundant caution, the company has deposited service tax, GST, and interest under protest amounting to ₹2,695 crore,” ONGC said.
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