Oil India Q2 net drops 5.3 per cent to Rs 903.64 crore

Oil India Ltd, India's second largest state explorer, on Tuesday reported a 5.3 per cent drop in its second quarter net profit on lower crude oil production and higher fuel subsidy.

Net profit in July-September quarter dipped to Rs 903.64 crore, or Rs 15.03 a share, from Rs 954.57 crore, or Rs 15.88 a share, the oil retailer said in a statement.

Profits fell as the company shelled out 7.5 per cent more fuel subsidy at Rs 2,233.70 crore in the quarter under review.

Upstream firms like Oil India and ONGC bear a portion of the losses fuel retailers incur on selling diesel, domestic cooking gas (LPG) and kerosene at government control prices. They do so by selling crude oil produced by them at a discount to the downstream companies.

The subsidy outgo lowered net profit by Rs 1,265.68 crore, Oil India noted.

Net realisation on crude oil, after it gave a discount of $56 to downstream refineries like IOC, was at $52.33 per barrel, marginally lower than $52.63 a barrel in the corresponding quarter a year ago.

Crude oil production slipped 4.6 per cent to 0.916 million tonnes while natural production at 0.666 billion cubic metres was lower than 0.69 bcm in July-September of 2012.

"The decrease in crude oil production and sales quantity is due to certain bandhs and blockades (in North East) which affected operations in Q2 FY14. The crude oil loss due to such bandhs and blockades was 3456 tonnes during Q2," the statement said.

Turnover was up 12.58 per cent at Rs 2,836.40 crore in the quarter ended September, 2013.

Net profit fell 19.74 per cent to Rs 1,512.72 crore, or Rs 25.16 a share, in the first half of current fiscal year (FY14) as subsidy outgo soared 3 per cent to Rs 4,215.76 crore.

Turnover was almost unchanged at Rs 4,934.17 crore during the quarter.