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

Gandhi’s Triumph over the Fear of Death

The Essential U. R. Ananthamurthy Edited by N. Manu Chakravarthy and Chandan Gowda Aleph Books, Rs 899, 312 pages

Bird walks for youngsters to be held across India

Early Bird and the Rainmatter Foundation have announced five bird walks, led by naturalists, across India on June 10. The walks, to be held in Agartala, Dehradun, Mysore, Panjim, and Tirupati early in the morning, are part of the Rainmatter Foundation’s Walking Lightly campaign, being observed throug

India celebrates Environment Day with thrust on Mission LiFE

The Ministry of Environment, Forest and Climate Change, Government of India organized the World Environment Day on Monday with a thrust on Mission LiFE. The concept of LiFE, i.e., Lifestyle for Environment was introduced by prime minister Narendra Modi at the World Leaders` Summit in Glasgow at COP26, when

Green banking: an emerging way forward

Green Banking is an initiative taken by the banks to promote environment-friendly practices and reduce carbon footprint of their activities. Green financing (a part of ‘Green Banking’) is a broad term that can refer to a financial investment flowing into sustainable development projects and ini

GST revenue in May clocks 12% y-o-y growth

The gross Good & Services Tax (GST) revenue collected in the month of May, 2023 is ₹1,57,090 crore of which CGST is ₹28,411 crore, SGST is ₹35,828 crore, IGST is ₹81,363 crore (including ₹41,772 crore collected on import of goods) and cess is ₹11,489 crore (including ₹1,057 crore collecte

Need local solutions to climate change: P Velrasu of BMC

Climate change rising temperature and sea levels are posing new risks for coastal cities. With population growth rate of 1%- 2% in India every year, Mumbai too is growing and is population will double from 20 million to 40 million in the coming years. The city is also at the risk of rising sea level. It ne

Visionary Talk: Amitabh Gupta, Pune Police Commissioner with Kailashnath Adhikari, MD, Governance Now


Archives

Current Issue

Opinion

Facebook Twitter Google Plus Linkedin Subscribe Newsletter

Twitter