New Delhi, July 28: ONGC today said its subsidy burden could come down with the increase in diesel prices.

Subsidies to PSU oil refiners for selling fuel below costs have been eating into ONGC’s profits.

In the first quarter of 2011-12, the upstream oil major managed to post a growth of 12 per cent in net profit at Rs 4,095 crore from Rs 3,661 crore a year ago. During this period, subsidy burden rose 118.4 per cent to Rs 12,046 crore from Rs 5,515 crore.

ONGC’s bottomline would have been hit further had the government not lowered the subsidy-sharing norm.

Subsidy payouts fell to 33 per cent of the oil refiners’ losses from 39 per cent in the fourth quarter of the last fiscal, which led to a reduction by as much as 50 per cent in the burden. “We paid around Rs 12,046 crore to state-owned refiners as the subsidy sharing has returned to 33 per cent,” A.K. Hazarika, chairman and managing director of ONGC, said, while attributing the quarterly performance to the reduced subsidy burden.

Sales during the quarter rose 18.7 per cent to Rs 16,268 crore from Rs 13,710 crore a year ago. “Our gross realisation on crude sales was $121.29 per barrel in the first quarter but after giving subsidy discounts, our net realisation was only $48.76 per barrel, almost the same as the net realisation in the same period last fiscal,” Hazarika said.

He said the company benefited from additional revenues garnered from higher natural gas prices and higher output from joint venture projects.