High subsidies and wages are paralyzing to the state run companies day by day. The ever increasing international prices of crude oil have worsened the scenario. Following such high subsidies and wages state run Oil and Natural Gas Corporation (ONGC) has incurred net profit drop in last ten years.

The Q4 profit of the country's largest oil exploration and Production Company has dropped by 2%. The net profit fell 2 per cent to Rs 2,627 crore during the fourth quarter. ONGC has lost its status of the highest profit-making company to Reliance Industries following this loss in net profit for Q4. The company's depreciation cost also rose by 34 per cent to Rs3844.48 crore during the quarter from 2,863.73 crore.

The company has given discounts worth Rs8400 crore to oil marketing companies. This higher amount of subsidy has leaded to decline in net profit. ONGC should have got a price of $100.37 for every barrel of crude oil it sold.

However, it had sold oil at $49.66 per barrel to government-owned refiners after giving a discount of $50.71 a barrel. The higher subsidy payout was the major reason for profit loss.

Company chairman and managing director R.S. Sharma has also expressed concerns over rising prices of oil. He said that state run company will not be able to sustain the burden of further rise in international prices of crude oil.

The government should think over the other ways to save oil companies from loss. Oil companies such as Indian Oil, Bharat Petroleum and Hindustan Petroleum has faced Rs245000-crore deficit for selling fuel before hike in fuel the prices.