Standard Post with Image

'Duties to Slash ONGC Profit Nearly $1 Bn'

  • Oil & Natural Gas Corp's (ONGC) profit before tax (PBT) will take a hit of Rs 50 billion ($977 m) in 2012/13 due to Budget proposals to raise duties on oil production, and an increase in service and other taxes, its chairman said.

  • The budget for the fiscal year beginning in April proposed to raise cess on crude oil to 4,500 rupees per tonne from 2,500 rupees per tonne.

  • The state-run company has asked the government to adjust the extra burden from the Budget against oil subsidies, Sudhir Vasudeva told reporters at an industry event.

  • The government subsidizes prices of diesel, kerosene and cooking gas to protect the poor from the impact of inflation pressures.

  • This means producers such as ONGC must share the shortfall by selling crude to refiners at a discount.

  • Because of the subsidies, the total revenue losses of India's state-run oil companies are expected to rise to $28.5 billion in the fiscal year ending March, nearly double the amount in the previous year. ($1 = 51.1750 Indian rupees)

Source