ONGC, OIL to face royalty burden worth $1 bn -Governance Now

ONGC, OIL to face royalty burden worth $1 bn

Petroleum ministry has said that both the companies will pay royalty to all similarly placed crude oil-producing states at pre-discount prices effective from February 1, 2014

GN Bureau | July 18, 2016

#ONGC #OIL #petroleum ministry #royalty #crude oil

Government-owned Oil and Natural Gas Corporation Limited (ONGC) and Oil India Limited (OIL) will face an additional royalty burden of more than $1 billion.

The Narendra Modi government has decided that they would have to pay royalty to crude oil-producing states such as Assam, Gujarat, Andhra Pradesh, Rajasthan and Tamil Nadu, according to a news report published in The Financial Express. Petroleum ministry in an order dated July 15 has said that both the companies will pay royalty to all similarly placed crude oil-producing states at pre-discount prices effective from February 1, 2014.

Despite the fact that the shift from gross to net price for royalty was made in 2008, both the companies will have to pay royalty on their gross realisation on sale.

The difference between the gross and net price is the subsidy burden borne by these upstream companies to compensate state-run IOC, HPCL and BPCL for selling sensitive petroleum products below market cost.

ONGC and Gujarat are embroiled in a legal tussle over the calculation of royalty payments. In November 2013, the Gujarat High Court ordered ONGC to pay Rs 10,000 crore dues to the state till September 2013 to make up for the royalty dues.

The maharatna company appealed in the Supreme Court against the Gujarat HC order and on February 13, 2014, the apex court stayed the high court order, but told ONGC to pay royalty at the pre-discount price starting February.

Comments

Other News

Budget 2025: Meeting the expectations of youth and middle class

The new year brings with it a mix of hope and expectations, especially among the youth and middle class who have placed their trust in the Narendra Modi government. The upcoming Union Budget is being eagerly awaited by these two groups in particular, in the hope it addresses the very real concerns of a gen

This book on Gujaratis is like a sumptuous ‘thaali’…

The Gujaratis: A Portrait of a Community By Salil Tripathi Aleph Books, 744 pages, Rs 1,499 “As the l

At Davos, Maharashtra inks MoUs worth Rs 15.70 lakh crore

The Maharashtra government has signed 54 memorandums of understanding (MoUs) worth Rs. 15.70 lakh crore at the ongoing WOrld Economic Forum in Davos. The highest ever investment proposals of the state government are expected to generate 15.95 lakh jobs. The largest MoU was inked with Relianc

How Renewable Energy revolution is sweeping across India

As India accelerates its transition towards a sustainable future, its renewable energy (RE) sector has witnessed unprecedented growth. In 2024, the country made significant strides in solar and wind energy installations, policy advancements, and infrastructural improvements, setting the stage for ambitious

Celebrating ten years of Beti Bachao Beti Padhao

The ministry of women and child development is set to celebrate the 10th anniversary of the Beti Bachao Beti Padhao (BBBP) campaign, marking a decade of relentless efforts to protect, educate, and empower the girl child in India. This milestone aligns with the vision of a Viksit Bharat 2047 and the global

Bhashini provides translation support at this great congregation of languages

The Ministry of Electronics and Information Technology (MietY) has offered technological support at the Maha Kumbh in Prayagraj being held from January 13 to February 26, 2025 with the integration of Bhashini for multilingual accessibility. ‘Digital Lost & Found Solution&rs