New Delhi: GAIL India Ltd announced a massive 64 per cent drop in its December quarter net profit as it could not sell imported gas contracted at higher price.
In a statement, the state-owned gas utility said net profit in October-December at Rs 604.08 crore was 64 per cent lower compared to Rs 1,679.4 crore in the same period a year ago. The profit was impacted by “lower off take of long-term contracted LNG by power and fertiliser plants,” it said. Liquefied natural gas (LNG) from Qatar is imported on a long-term contract at close to USD 13 per million British thermal unit whereas the same fuel is available in the spot or current market at about USD 7. This has lead to a situation where users prefer buying spot LNG rather than Qatar gas.
GAIL purchases 60 per cent of the 7.5 million tons a year of LNG that Petronet LNG Ltd imports from RasGas of Qatar on a 25-year contract. Pre-tax profit from marketing of natural gas fell to one-tenth. It was Rs 505.36 crore in third quarter of previous fiscal and this year it was just Rs 51.14 crore.
