MUMBAI: State-run Oil and Natural Gas Corp (ONGC), India’s biggest energy explorer, reported yesterday third-quarter net profit fell 17.5 percent as earnings suffered from subsidies given to fuel retailers. Net profit for the October to December quarter slid to `55.63 bn ($1.03m) from `67.41bn in the same period a year earlier, the company said in a statement.
Under government rules, ONGC must sell discounted fuel to state-run refineries which in turn provide diesel, petrol and other fuel products at cheaper rates to the public.
This imposes a heavy subsidy burden on the company, affecting its profit. ONGC chairman Sudhir Vasudeva said that the company’s net profit would have been higher by `72.70bn if did not have to pay the subsidy bill. ONGC, which accounts for nearly two-thirds of India’s oil output, said sales rose 16 percent to `210m. Profits in the same year-ago period were lifted by a one-off gain of `31.4bn, the company said. However, the profit for the three months to December still beat market forecasts. Analysts had expected the firm to show a profit of around `53bn.
Fujairah to raise oil storage capacity
DUBAI: Oil storage capacity in the United Arab Emirates port of Fujairah is expected to rise by 2 million cubic metres (mcm) this year to just over 6 mcm, port data shows. The port outside the Strait of Hormuz, a vital Gulf oil export route which Iran has threatened to block, has seen a boom in storage facility building since late 2009.
But the pace of construction has slowed over the last year, several traders said, with the looming threat of overcapacity and lower forward prices for oil making storage unattractive.
Fujairah had 4.07 mcm of oil storage capacity at the end of 2012, port figures show, with Vopak Horizon Fujairah accounting for about half.
Another 2 mcm is expected to come online in 2013, including capacity additions from existing companies such as the Emirates National Oil Company (ENOC), GPS Chemoil and Socar Aurora, along with new port investors such as Gulf Petrochem.reuters/AFP
