Country’s largest petroleum producer Oil and Natural Gas Corporation (ONGC) has reported a 16 per cent drop in its net profit in the quarter ended March 31, 2009, on LPG and kerosene subsidy payout and one-time liability on a field operated by Cairn.

It is believed that a fall in output and lower realizations hauled the company’s profit in the final three months of 2008-09.

Giving the details, company CMD RS Sharma said that the net profit dipped to Rs 2,206.76 crore in January-March quarter from Rs 2,627.10 crore a year ago.

Total operating income of the state-run company also fell to Rs 13,833.58 crore from Rs 16,699.21 crore in Q4 of 2007-08 on lower sales.

ONGC's oil production declined to 6.460 million tonnes in Q4 against 6.915 million tonnes a year ago.

However, the gas output of the company raised to 5.347 billion cubic meters from 6.158 bcm.

For 2008-09, ONGC posted a net profit of Rs 16,126.31 crore, down by 3.44 per cent from Rs 16,701.65 crore in FY'08. “The impact of the subsidy on the net profit was Rs 15,798 crore,” said Sharma.

Commenting over losses due to natural gas sale prices, D K Saraf, director (finance) ONGC said: “We incur a loss of about Rs 2,500-3,000 crore on gas sales, which is over and above the subsidy paid on petroleum products.”

ONGC declared a final dividend of Rs 14 per share for the 2008-09 fiscal.