The Union Petroleum Ministry today released Rs 773 crore of oil royalty, last tranche ofoil royalty arrears due to Assam.
This was announced by Union Petroleum Minister DharmendraPradhan and also shared by Assam Finance Minister Dr Himanta Biswa Sharma.
"Now we've received entire arrears of ₹6306cr over last 3 FY which was denied by then PM Dr Manmohan Singh" said DrSharma.
According to sources, during the period from April 2008 toJune 2016, the Assam government incurred loss of crude oil royalty ofapproximately Rs 7,755.88 crore. The revenue loss happened as the oil producingcompanies paid the royalty to the oil-producing States like Assam and Gujaratat discounted prices.
However in July 2016, the Government of India ordered boththe ONGC and the OIL to pay Assam royalty at the pre-discounted rates fromFebruary 2014.
Official data indicate that the oil-producing companies havealready paid Rs 4,834.42 crore in four installments. In August 2016, OIL andONGC paid the first installment of Rs 1449.88 crore. The subsequentinstallments of Rs 945.90 crore; Rs 670 crore; Rs 1,311.78 crore; and Rs 456.86crore were released by the Ministry of Petroleum and Natural Gas.
According to the Oil Field Act, OIL and ONGC are required topay 20 per cent royalty on price of crude oil it extracts from onland oilblocks to the respective State governments.
But the Government of India, in a 2004 order, asked OIL andONGC to share a part of the subsidy on petrol, diesel and cooking fuels — LPGand kerosene — by way of giving discount of crude oil they sell to refineries.In 2008, the Government asked them to pay royalty on the discounted price,thereby having a negative impact on the revenue of oil producing States.
In 2011, the Gujarat government filed a petition before theGujarat High Court, stating that it should be paid royalty at the market rate.The High Court ruled in its favour in November 2013. Though the ONGC challengedthe decision in the Supreme Court, the apex court asked the company to payGujarat at gross or pre-discount price during pendency of the petition.
