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Oil and Natural Gas Corp. Ltd (ONGC), India’s biggest energy explorer, reported its biggest profit in nine quarters after income from sources other than its main operations doubled because of a provision writeback. Net income rose to INR 7,130 crore in the three months ended 31 December from INR 5,560 crore a year earlier, according to a stock exchange filing on Thursday. That beat the INR 5,770 crore median estimate of 30 analysts surveyed . Sales fell 1.2 Percent to INR 20,740 crore.

ONGC wrote back INR 2,500 crore of tax provisions it had made in earlier quarters on crude oil discounts it offers refiners. The company contested the refiners’ decision to claim tax discounts on crude sales. The dispute is before the federal oil ministry and pending a decision. “In the absence of any further communication from the oil ministry, the company has decided to revise the sales revenue and write back the provision made” until 30 September, ONGC said in the statement.

Prime minister Manmohan Singh’s government is asking state-controlled oil explorers ONGC and Oil India Ltd to bear a larger portion of the subsidy given to state-run refiners for selling fuels below cost. The higher subsidy is cutting the company’s cash reserves and may turn it into a cash-deficit company, chairman Sudhir Vasudeva said on 25 September. Total costs declined to INR 12,900 crore, compared with INR 14,160 crore a year ago. Other income rose to INR 2660 crore from INR 1,280 crore a year ago.

Source-On Request