ONGC pays Rs 6,452 crore as windfall tax in Q2 as against Rs 14 crore in Q1 FY23

NEW DELHI: Oil and Natural Gas Corporation (ONGC), India’s top oil and gas producer, paid Rs 6,452 crore as windfall tax or special additional excise duty (SAED) in the second quarter ending September 2022 (Q2FY23). 

The company said if this levy was not there, ONGC profits would have surpassed its record earnings of July-September 2021. However, the windfall tax, which was levied by the government and revised every 15 days according to global oil prices, has inflated the company’s excise duty manifold in the Q2 FY 2022-23. 

The state-owned company paid Rs 6,452 crore in the second quarter, as against Rs 14 crore in the first quarter of FY23 and Rs 7 crore in the previous year same quarter FY22. If the government had not levied windfall tax, the gas producer would have to pay only `18 crore in current quarter. 

“The firm paid Rs 6,400 crore as special additional excise duty (SAED) in the quarter… the mechanism to levy windfall profit tax ensures that the company gets $75-76 per barrel realisation,” said Pomila Jaspal, ONGC Director (Finance) at investor call. The government introduced windfall tax or special additional excise duty (SAED) on July 1, 2022, on oil companies to take gains accruing from the global energy price surge. Thus, ONGC posted a 30% fall in its net profit in the second quarter. Its net profit was Rs 12,825.99 crore in July-September 2022-23, as against Rs 18,347.73 crore in the same period a year ago. 

Prabhudas Lilladher in its report agreed that the recent government decision to impose windfall taxes will mean ONGC’s crude oil realization will be $73 per barrel, thereby not benefiting from high commodity prices but gas prices will remain healthy.  The company made six discoveries during the current fiscal year in the KG basin acreage it holds. Out of six discoveries notified till date during FY2022-23, two discoveries viz. Mandapeta-60 and Kesanapalli West Deep-7 have already been monetised by ONGC. 

ONGC net fell 30% on windfall tax in Q2
Company paid Rs 14 crore as windfall tax in the first quarter of FY23 and Rs 7 crore in the previous year same quarter of FY22. If the government had not levied windfall tax, the gas producer would have to pay only Rs 18 crore in current quarter. ONGC posted 30% fall in its net profit in Q2FY23