The Hindu Business Line : Govt hikes oil royalty Gujarat, Assam to be richer by Rs 400 cr

GUJARAT and Assam have landed a bounty of around Rs 200 crore each this fiscal with the Cabinet today approving a proposal to revise the royalty rate on crude oil from an ad hoc fixed rate of Rs 850 per tonne to an ad valorem rate of 20 per cent.

The additional royalty burden would be borne by Oil and Natural Gas Corporation and Oil India Ltd, which produce nine million tonnes and three million tonne per annum respectively in the two States.

Briefing newspersons here today after the Cabinet meeting, the Union Parliamentary Affairs Minister, Ms Sushma Swaraj, said that the oil producing States have long been pressing for a revision of royalty rates.

The two States account for oil production of around 12 million tonnes of the 32 million produced domestically. The remaining 22 million tonnes is produced offshore. In the case of offshore royalty, which accrues to the Union Government, the Petroleum Ministry had mooted a 10 per cent ad valorem rate.

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