Guwahati: Assam government has demanded payment of crude oil royalty by the ONGC to the state at the rate applicable to the state of Gujarat in order to prevent huge revenue loss to the state.
Assam chief minister Tarun Gogoi on Tuesday met the Union Minister of State (Independent charge) for Petroleum & Natural Gas, Dharmendra Pradhan and drew his attention to the revenue loss incurred by the state of Assam due to payment of royalty on crude oil on post-discounted price.
“The Ministry of Petroleum and Natural Gas (MoP&NG) has been allo-wing public sector oil produ-cing companies, ONGC and OIL to sell crude oil to the oil marketing companies at highly discounted price and consequently also to pay royalty to the oil producing states on the basis of such highly discounted sale price of crude oil.
This has resulted in cumulative loss of revenue to the tune of Rs. 10,000 crore to Assam since 2008-09 onwards,” Gogoi pointed out. Referring to the verdicts of Gujarat High Court and the Supreme Court on a petition filed by the Gujarat Government that the royalty shall be payable to the state on fair market price of crude oil and not on discounted price of crude oil, Gogoi said the orders was also applicable to the PSU’s like ONGC & OIL operating in Assam which is entitled to get royalty on the actual market driven price.
“The MoP&NG may give appropriate instructions to ONGC and OIL to pay royalty to Assam also at pre-discounted price of crude oil with effect from 1st Febr-uary, 2014 as in the case of Gujarat,” Gogoi made a request.
Gogoi made a plea to Pradhan to initiate necessary steps for suitable amendment of the Oilfields Act 1948 and the Petroleum and Natural Gas Rules, 1959 so as to restrict the unavoi-dable loss and operational utilization quantity to a max-imum of 0.5 % in case of cru-de oil and 3% in case of natu-ral gas qualifying exemption from royalty payment.
“The C&AG of India had reported significant loss of revenue of the State on account of unavoidable loss and operational utilization in the absence of standard norms,” he added.
