Net realisations should rise despite falling crude: ONGC

Q: What will be the impact of falling crude prices on your realisations?

A: Subsidy burden of the government debt comes down and even for ONGC also the under recovery burden which we share with the oil marketing companies and with the government that also comes down. So, with crude prices coming down we expect that our net realisation would not be adversely impacted and it has all the potential to go up.

Q: On what basis are you saying your net realisation will not be impacted because as of now you have to pay that fixed subsidy of USD 56 a barrel irrespective of where the Indian crude basket is. We have not heard anything from the government even though there is an over recovery on diesel. How are you sounding so confident about net realisation, some analysts are fearing that perhaps it is going to fall below USD 40 in the second quarter?

A: I do not know what it would be in the second quarter, that we would know in couple of days but at the same time I am quite confident that when we are talking of FY15 the crude prices would definitely be more than what they were last year because ultimately the government considers all the facts and only then decides that how crude subsidy would be passed on to the upstream companies.