The government levied a tax on windfall profits resulting from a global surge in energy prices, but Friday saw the leading oil and gas producer in India, ONGC, post a triple net profit in the June quarter thanks to record prices.
According to a stock exchange statement by the company, Oil and Natural Gas Corporation (ONGC) had a standalone net profit of Rs 15,205.85 crore, or Rs 12.09 per share, from April through June, up from Rs 4,334.75 crore, or Rs 3.45 per share, in the same period last year.
Sequentially, the profit exceeded the Rs 8,859.54 crore net profit for the months of January through March. In contrast to the USD 65.59 per barrel rate realized during the same period last year, the company received USD 108.54 per barrel for the crude oil it sold in the quarter, increasing earnings. From USD 1.79 per million British thermal units, gas price realization increased by more than a factor of two to USD 6.1.
Due to Ukraine’s position as a major exporter of commodities, particularly to Europe, fears about worldwide shortages have been raised as a result of the rise in international energy prices since Russia’s invasion of the country in late February.
As recession worries increase, oil prices have fallen below USD 100 per barrel this month, raising concerns that a slowing economy could reduce demand for petroleum goods. The current windfall profit tax rate on domestic crude oil is USD 17,750 per tonne, which will reduce ONGC’s earnings as well as those of other domestic crude oil producers like Oil India Ltd. and Vedanta Ltd. in the most recent quarter, which started in July.
According to ONGC, revenue increased from Rs 23,021.64 crore in the same period last year to Rs 42,320.72 crore in the first quarter of the current fiscal year, which started on April 1. The profits were also boosted by an increase in crude oil production of 5% to 5.5 million tonnes and an increase in gas production of 1.4% to 5.38 billion cubic meters.
Later, ONGC stated that during the current fiscal year, two gas discoveries were made. Both a block in West Bengal and a block in Andhra Pradesh have discovered gas.ONGC reported a net profit of Rs40,306 crore on a revenue of Rs. 1.1 lakh crore for the entire fiscal year 2021—2022 (April 2021—March 2022). In that year, the average price per barrel was USD 76.62, and the price per mmBtu for gas was USD 2.35.
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