State-run oil major Oil and Natural Gas Corporation (ONCG) on Thursday posted 12 per cent jump in the March quarter net profit as it reversed part of impairment losses and got exempted the fuel subsidy from the Government. The profit was mainly due to the reason as it reversed Rs 800 crore of impairment taken earlier on drop in oil prices and got another Rs 633 crore from the Government for excess fuel subsidy it had paid earlier. It also gained Rs 1,585 crore on dry well provisioning, according to the company officials.
Commenting on the results, Chairman and Managing Director DK Sarraf, however, told the reporters that at Rs 4,416 crore, ONGC’s net profit in the January-March quarter was 12.2 per cent higher than Rs 3,935 crore net profit in the same period of the previous fiscal. We had in the third quarter of 2015-16 fiscal provided for an impairment loss of Rs 3,994 crore. This has now been brought down to Rs 3,142 crore after crude oil prices rebounded a bit,” Sarraf said.
Impairment is taken to reflect value of oil and gas reserves a company holds after prices have fallen. The oil major had in the first quarter of 2015-16 paid Rs 1,133 crore to fuel retailers to subsidise lPG and kerosene and another Rs 596 crore in the July-Sept quarter.