India's oil explorer ONGC quarterly net profit falls 17.5%

State-run Oil and Natural Gas Corp (ONGC), India's biggest energy explorer, reported on Monday 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 billion rupees ($1.03 million) from 67.41 billion rupees 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 72.70 billion rupees 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 210 million rupees.

Profits in the same year-ago period were lifted by a one-off gain of 31.4 billion rupees, 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 53 billion rupees.