(Reuters) – India’s Oil and Natural Gas Corp (ONGC) reported a surprise rise in second-quarter profit on Monday, helped by a decline in tax expenses due to the scrapping of the levy on petroleum crude.
The state-owned firm’s standalone profit jumped 17% to 119.84 billion rupees ($1.42 billion) in the quarter ended Sept. 30. Analysts had expected 91.23 billion rupees, according to data compiled by LSEG.
Its standalone earnings exclude profit from its joint ventures and operations outside the country.
The company, which contributes to around 71% of domestic crude oil production, posted a 6.5% drop in tax expenses to 30.52 billion rupees in the three-month period.
During the quarter, India scrapped the windfall tax it had levied on petroleum crude in 2022. The windfall tax was scrapped as global oil prices softened compared to 2022.
However, its revenue from operations fell 3.6% to 338.81 billion rupees, missing analysts’ estimate of 340.56 billion rupees, according to data compiled by LSEG.
ONGC’s crude oil price realisation, or the price at which it sells the product, fell 7.7% to $78.33 per barrel in the second quarter. Global crude oil prices slumped around 17% in the quarter.
Domestic fuel consumption in the quarter dipped as above-average rainfall led to a slowdown in irrigation and farm machinery usage, which consumes diesel. Sales of automobiles, another key diesel demand driver, also declined.
Peer Oil India, earlier this month, posted a quarterly profit that missed estimates due to lower prices and tepid demand.
($1 = 84.3580 Indian rupees)
(Reporting by Manvi Pant in Bengaluru; Editing by Abinaya Vijayaraghavan)
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