Oil and Natural Gas Corporation (ONGC), India’s largest oil and gas producer, lost over Rs 1,570 crore in revenues on sale of natural gas at price lower than its cost of production during 2007-08.ONGC produces more than 40 per cent of total production of natural gas in the country.

Of the 32.405 billion cubic meters (bcm) of gas produced in 2007-08, 22.334 bcm was produced by ONGC.

“ONGC is having economic loss in gas business. In 2007-08, ONGC made (loss) of Rs 1,570.76 crore from gas business,” Minister of State for Petroleum and Natural Gas Dinsha Patel said in a written reply to a question in Rajya Sabha here today.

The company’s average cost of production of gas during 2007-08 was Rs 3,426 per million standard cubic meters (mmscm) but it realised only Rs 3,147 per mmscm on sales.

ONGC lost Rs 279 per mmscm, he said.

To another question, he said ONGC has withdrawn from the proposed refinery project at Kakinada in Andhra Pradesh as it found it economically unviable.

“ONGC’s financial appraisal indicated that the project would not provide appropriate returns, even with enhanced capacity of 15 million tons per annum,” he said.

Separately, Patel said there was no proposal before the government to levy windfall profit tax on private refineries.

Reliance Industries posted profits of Rs 7,722.59 crore and Rs 10,372.76 crore on refining crude oil in 2006-07 and 2007-08, respectively. Essar Oil posted losses of Rs 54.55 crore and Rs 44.09 crore in the same period.

“At present, no such proposals (to levy WPT) are under consideration,” he said.

source: BusinessStandard

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