Assam Chief Minister Tarun Gogoi Monday requested Prime Minister Narendra Modi to ensure payment of oil royalty at prevailing market prices, saying Assam has incurred a loss of Rs.10,000 crore since 2008 because of disbursement of oil royalty at highly discounted prices to central PSUs.
Gogoi sent a letter to Modi regarding underpayment of royalty.
"A special category and resource-constrained state like Assam cannot afford such a huge loss of revenue. Oil producing states like Assam should not be denied the benefits of its natural resources and made to compensate for the under-recoveries of the central oil marketing Public Sector Units," Gogoi said in the letter.
He referred to a verdict by the Gujarat High Court on a petition filed by the state government that royalty on crude oil be made on fair market price and not on discounted price, as well as a Supreme Court order that royalty be given by ONGC to the Gujarat government on pre-discounted price of crude oil with effect from Feb 1, 2014.
"In view of the developments, I would request you to advise the petroleum and natural gas ministry to give appropriate instructions to ONGC and OIL to pay royalty on crude oil at 20 percent of the wellhead price, in addition to VAT and other state taxes at pre-discounted price to government of Assam with effect from Feb 1," he said.