OIL India and ONGC pay differential royalty to Assam

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The Chief Minister of Assam, Shri Sarbananda Sonowal receiving the cheque on payment of differential royalty from the CMD of ONGC, Shri Dinesh Kumar Sarraf, in the presence of the Minister of State for Petroleum and Natural Gas (Independent Charge), Shri Dharmendra Pradhan, in New Delhi on August 04, 2016. The Minister of State for Railways, Shri Rajen Gohain is also seen.

Public Sector Upstream Oil Companies- Oil India Limited and ONGC Limited made a payment to the Government of Assam, towards differential royalty on pre-discount price for the period from 01.02.14 to 31.03.16. The amount paid by OIL is Rs. 1,149.24 crore and the amount paid by ONGC is Rs. 300.64 crore. The cheques were handed over by the CMDs of ONGC and OIL to the Chief Minister of Assam, Shri Sarbananda Sonowal at New Delhi, in the presence of Minister of State (I/C) for Petroleum and Natural Gas, Shri Dharmendra Pradhan and other dignitaries.

Speaking on the occasion, the Petroleum & Natural Gas Minister Sh. Dharmendra Pradhan said that injustice was being done to Assam due to political reasons in the payment of royalty. He said the differential royalty being paid today was Assam’s right. The Minister said that the natural resources of a place belong to the people living there and, hence, it was proper that full royalty should be paid to Assam for the oil explored there. He said that this gesture will provide the feel-good factor and improve cooperation between the oil companies and Assam.

Assam Chief Minister, Sh. Sarbananda Sonowal thanked the Petroleum & Natural Gas Minister for releasing the amount due to it in a single installment. He said that Assam is suffering from a natural disaster and is in acute need of funds. He also thanked the Oil PSUs for contributing Rs. 15 crore towards the CM Relief Fund from their CSR initiative.

As per statutory provisions, royalty on production of crude oil in the state of Assam is paid by ONGC and OIL to Assam Government. Effective from 2008-09, the royalty to all State Governments including Assam was being paid on post-discount price of crude oil realized by ONGC and OIL from the Public Sector Oil Marketing Companies (OMCs). In view of the litigation arising out of the loss of royalty to State Governments due the discounts being provided by the ONGC and OIL to public sector OMCs and interim decision of the Supreme Court dated 13.02.14, MoP&NG vide letter dated 15.07.16 has decided that ONGC and OIL will pay royalty to all crude oil producing states at pre-discount prices effective 01.02.14, pending the outcome of the SLA (Civil) No. 1596/2014 filed by ONGC Ltd. before the Hon’ble Supreme Court.

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