Move Court to recover Rs 10K-cr oil royalty: Centre to Assam

The Assam government should approach the judiciary for recovering around Rs 10,000 crore of pending oil royalty from PSU firms, Union Petroleum Minister Dharmendra Pradhan said today.
However, Assam Chief Minister Tarun Gogoi said in December 2014 that the state government had approached the Gauhati High Court seeking a direction to energy firms like ONGC and OIL to pay royalty on crude oil on pre-discounted rate to the state in accordance with a Supreme Court order.
"When I met the Assam Chief Minister, I asked him to go to the Court regarding the royalty issue... But the Assam government is not going to the Court," Pradhan told reporters here.

Gujarat too had issues regarding royalty payment for crude oil and it approached the Supreme Court, who ruled in favour of the state government and then they got the payment, he added.
"On our part, we will tell involved PSUs like ONGC not to fight with Assam government in the Court," Pradhan said at a press conference after releasing the Hydrocarbon Vision 2030 for Northeast India here.
The problem regarding payment of royalty started many years ago as the "then Congress government did not do justice to the states", he added.

"We are in-principle not for any discriminatory treatment between states. However, the Assam government has to approach the judiciary to recover the pending dues from the firms," the Minister said.

In April 2015, Pradhan had supported Assam government's claim of seeking royalty on crude from PSU firms, including ONGC and OIL, at a pre-discounted rate in line with a Supreme Court order.
"Assam's expectation is right... Today, I met the Chief Minister (of Assam) and we discussed the issue. I will definitely take up this matter," Pradhan had said.
On December 1, 2014, Gogoi had said: "We have recently filed a petition to Gauhati High Court regarding the royalty issue by oil producers. We want the High Court to direct the companies to pay royalty to Assam as per the Supreme Court decision regarding a petition by Gujarat.

The Ministry of Petroleum and Natural Gas has been
allowing ONGC and OIL to supply crude to oil marketing companies at highly discounted rates and has asked the producers to pay royalty to the states on the basis of such subsidised prices.
The Assam government claims that the amount of discount has at times been as high as 90 per cent or more and this has handed the state a cumulative loss of revenue of more than Rs 10,000 crore since 2008-09.
The Supreme Court, in its interim order, had directed ONGC to pay oil royalty to Gujarat at pre-discounted crude price beginning from February 1, 2014.

Earlier, the Gujarat High Court in a petition filed by the Gujarat government held that the royalty should be payable to the state at market price of crude oil and not post-discount price.
The Assam government has been demanding that the state gets its share of royalty on crude and VAT as well as other taxes at actual market price and not on the basis of heavily discounted sale price as is the case of Gujarat.
Upstream companies like ONGC and OIL are liable to pay royalty to the states on production of crude oil at 20 per cent on well head price, subject to certain deductions.

Besides, such firms are liable to pay VAT at 5 per cent on sale of oil.