ONGC Q2 Net Profit Slumps 30% As Windall Tax Weighs

India’s largest oil and gas producer Oil and Natural Gas Corporation (ONGC) reported a 30 per cent year-on-year (YoY) fall in its net profit for the quarter ended September 2022.

Net profit for the quarter stood at Rs 12,826 crore in the quarter under review compared to Rs 18,348 crore in the year ago quarter.

Sequentially, the profit slipped 15.6 per cent as in the June quarter of this fiscal it had reported a profit of Rs 15,206 crore.

The fall in profit for the quarter under review came as the government brought a new tax on windfall profits arising from a spike in international energy prices.

The windfall tax is adjusted every 15 days in step with changes in global oil prices.

The company’s gross billing for cure oil it produced soared 37.7 per cent to USD 95.49 per barrel during the quarter from USD 69.36 per barrel a year ago.

ONGC director (finance) Pomila Jaspal at an investor called said that the firm paid Rs 6,400 crore as special additional excise duty in the quarter.

ONGC posted its highest ever quarterly net profit in last fiscal’s September quarter which was the highest by any Indian corporate after it opted for lower income tax in lieu of giving up exemptions.

As a result, its corporate income tax rate came to 22 per cent plus applicable surcharge and cess as against the earlier rate of 30 per cent plus applicable surcharge and cess.