New Delhi: State-owned Oil India Ltd on Monday reported 24.3 percent rise in net profit in the second quarter as record production offset more than doubling of fuel subsidy payout.

Net profit in July-September rose 24.29 percent to Rs 1,138.52 crore as compared to Rs 916.03 crore in the same period a year ago, OIL Chairman and Managing Director N M Borah told reporters here.

"Production in Q2 was a record 0.991 million tons, up from 0.939 million tons a year ago," he said adding OIL may cross the magical number of 4 million tons this fiscal.

The profit was up despite OIL's fuel subsidy outgo jumping to Rs 844.44 crore in Q2 from Rs 399.40 crore in the same period a year ago.

Upstream firms like OIL and Oil and Natural Gas Corp (ONGC) meet one-third of the revenues that fuel retailers lose on selling diesel, domestic LPG and kerosene at government controlled rates. This is done by giving discounts on crude oil it sells to refiners.

He said OIL realised USD 112.48 for every barrel of crude oil it produced. But after giving fuel subsidy discounts, its net realisation was USD 86.27 per barrel. In Q2 2010-11, the company's net realisation was 63.17 a barrel.

Turnover was up 50.11 percent to Rs 3,952.58 million tons. Natural gas output was up 16.12 percent to 0.677 billion cubic meters.

"The growth (in profit) is not just because of higher oil prices but also because of volume growth in oil and gas production," he said.