The oil marketing company Indian Oil Corporation for the second straight year emerged as the most profitable PSU firm surpassing ONGC. The company for the fiscalyear ended March 2018 reported a higher net profit figure by 12% at Rs 21,346 crore against the previous year's amount of Rs. 19,106 crore.
ONGC reported a higher net profit by 11.4 per cent to Rs 19,945 crore. In the private space, RIL owned by Mukesh Ambani topped as the most profitable company for the third year in a row. While TCS stood second in line.
Previously, ONGC stood as the most profitable company but then was taken over by private players like RIL and TCS.
The sustained profits by the oil marketing companies this way poses a question on the rationale when ONGC is asked to subsidise fuel that is sold by marketing companies including HPCL, BPCL and IOC.
In this support, the ONGC official is quoted in one of the agency reports as saying, "We are in the capital-intensive business of oil and gas exploration and production which has to be necessarily funded through internal accruals. Unlike refiners, we cannot get loans for risk E&P business.
He added, "Look at their profits. They don't need any subsidy support". Also he said, that the gas exploration company invests a sum of Rs 30,000 crore to Rs 35,000 crore on an annual basis and in case the subsidy is again offered, the investment cannot be sustained.