New Delhi, Nov. 13: Oil & Natural Gas Corporation Ltd (ONGC) today reported a 3 per cent rise in net profit at Rs 6,063.86 crore over Rs 5,896.57 crore a year ago even after paying a huge subsidy to cover the losses incurred by state-owned refiners.

ONGC paid Rs 13,796 crore to subsidise diesel, LPG and kerosene in the second quarter against a payout of Rs 12,330 crore in the same period last fiscal.

However, the rupee’s depreciation helped to counter the subsidy.

“Both oil and gas production have been flat and our net realisation has been less due to subsidy payout. It is only the rupee depreciation which saved the day,” chairman and managing director Sudhir Vasudeva said.

The higher profit breaks a sequence of four consecutive quarters of lower net profit.

Upstream oil producers such as ONGC give discounts on the crude oil they sell to refiners to cover a part of the losses incurred for selling fuel below cost.

ONGC said its net profit would have been higher by Rs 7,621 crore had it not paid the fuel subsidy.

“Our net realisation after paying subsidy in the second quarter was $44.84 per barrel compared with $46.76 per barrel last year,” Vasudeva said.

“If the current trend of realisation continues, we will have to dip into our cash reserves to the extent of Rs 5,000 crore this year and a similar amount next year,” he added.

ONGC had a cash reserve of Rs 13,000 crore at the beginning of the fiscal which will be exhausted in 2-3 years.

Turnover increased to Rs 22,414.67 crore in July-September from Rs 19,885.09 crore a year earlier.

Crude oil production was almost unchanged at 5.01 million tonnes, while natural gas output dipped 1.4 per cent to 4.55 billion cubic metres.

Overseas arm

ONGC Videsh Ltd, the overseas arm of the PSU, reported a 14.4 per cent increase in net profit in the first half of the financial year on higher crude oil and gas output.

Profit in the April-September period rose to Rs 1,886 crore from Rs 1,649 crore, the company said in a statement.

OVL is unlisted and does not release quarterly earnings. Shares of ONGC closed at Rs 268.40 apiece, up 0.96 per cent on the BSE.