Oil India Ltd, the nation's second biggest state explorer, today reported a 26 per cent drop in its fourth quarter as oil production fell and subsidy outgo rose sharply.
Net profit in January-March fell to Rs 565.62 crore, or Rs 9.40 per share, from Rs 764.54 crore, or Rs 12.72 a share, in the same period a year ago, the company said in a statement here.
The profit fell as the subsidy it pays to help state retailers sell diesel and cooking fuel at rates below cost, rose to Rs 2,347.60 crore from Rs 1,849.72 crore in Q4 of 2012-13 fiscal.
Upstream oil and gas producers like OIL and ONGC make up for about 48 per cent of the losses that retailers incur on selling diesel, LPG and kerosene at government-controlled rates. The payout is in form of discounts on crude oil they sell to IOC, BPCL and HPCL.
OIL said its gross billing for crude oil it produced in Q4 wss USD 106.55 per barrel but after giving a subsidy discount of USD 69.19, it realised only USD 37.36 per barrel. Last fiscal, it got a net price realisation of USD 55.44 after giving a subsidy discount of USD 56 per barrel.
Also, crude oil production dropped to 0.789 million tonnes from 0.873 million tonnes while natural gas output was lower at 0.624 billion cubic metres as compared to 0.648 bcm in Q4 of 2012-13.
Turnover fell to Rs 2,549.57 crore in January-March from Rs 3,103.62 crore a year ago.
For the full 2013-14 fiscal, the company reported a 17 per cent drop in net profit at Rs 2,981.30 crore. Subsidy outgo rose to Rs 8,736.84 crore from Rs 7,892.17 crore in 2012-13.
"Highest ever subsidy burden of Rs 8,736.84 crore - increase of 11 per cent over Rs 7,892.17 crore in 2012-13, has affected the profit-after-tax (PAT) by Rs 4940.78 crore," OIL said.
OIL, most of whose fields are in North-East, saw crude oil production fall over 5 per cent to 3.502 million tonnes while gas output was almost unchanged at 2.626 billion cubic metres.
"Shortfall in crude oil production was for reasons beyond the control of the company," the statement said without elaborating.
Turnover in 2013-14 fell to Rs 9,612.70 crore as compared to Rs 9,947.57 due to additional subsidy burden of Rs 439.19 crore.
The Board of Directors of OIL recommended a final dividend of 5