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State-run Oil and Natural Gas Corp. Ltd (ONGC) has posted a net profit of 18,348 crore in the September quarter, up 565% from the year-ago period, the company said in a statement on Friday.

The upstream hydrocarbon explorer clocked 44% increase in revenue to 24,353 crore for the quarter, against 16,916 crore in the year-ago quarter.

“The board has approved interim dividend of 110%, i.e. 5.50 on each equity share of 5. The total payout on this account will be 6,919 crore. The record date for distribution of dividend has been fixed for 23 November 2021, which has been intimated to the stock exchanges," it added.

After the covid-19 outbreak, the Indian basket of crude fell to $19.90 in April 2020. The prices have since rallied.

“During the quarter, the company has decided to opt for low-tax regime u/s 115BAA of Income Tax Act, 1961, with effect from FY21. Accordingly, the company recognized provision for tax expenses and re-measured its net deferred tax liabilities. The net impact due to availing the option has resulted in a decrease in deferred tax by 8,541 crore and decrease in current tax by 1,304 crore," it said.

India imports 85% of its oil needs and 55% of its natural gas demand. Consumption has also been 15-16% higher than the pre-covid levels.

“The production of crude oil and gas has declined during the current year mainly due to restrictive conditions created by cyclone Tauktae and due to the covid impact. Further, delay in mobilization of MOPU Sagar Samrat to WO-16 Cluster project impacted production from this field," ONGC said in the statement.

India’s domestic oil production continued its downward journey in September, falling 1.74% compared to the corresponding period of last year.

However, according to the monthly production report released by the ministry of petroleum and natural gas, gas production was up 26.6% in September.

ONGC also made some adjustments to the pricing formula for gas under the administered price mechanism. After prices remained unchanged in the first six months of FY22, India increased domestic natural gas prices by 62% from $1.79 per million British thermal units (mmBtu) to $2.9 per mmBtu. The bi-annual exercise determines the price for supplying domestic natural gas by explorers such ONGC and Oil India.

With domestic energy production at a low, energy security is an important focus area for the National Democratic Alliance (NDA) government as was articulated by Prime Minister Narendra Modi in his Independence Day speech.

India is a key refining hub in Asia with an installed capacity of over 249.36 million tonnes per annum across 23 refineries. India spent $62.71 billion on crude oil imports in FY21, $101.4 billion in FY20 and $111.9 billion in 2018-19.

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