Align crude cess with intl price: ONGC

Oil & Natural Gas Corporation (ONGC) has sought calibration of cess on domestic crude oil to international oil prices.

The government currently levies a cess of Rs 2,500 per tonne on crude oil produced by ONGC and Oil India (OIL). ONGC, however, wants it to move in tandem with international oil prices - rising by Rs 200 per tonne with every dollar increase in crude price and falling by the same proportion with every decline.

Sources said that ONGC, in a recent communication to the government, presented a proposal where no cess is levied on crude if prices remain up to $35 per barrel.

A cess of Rs 500 per tonne has been proposed if crude price range between $35-40 per barrel, Rs 1,000 per tonne for price between $40-45 per barrel, Rs 1,500 per tonne for price between $45-50 per barrel and Rs 2,000 per tonne for crude price ruling between $50-54.99 per barrel. At $55 per barrel crude price, a cess of Rs 2,400 per tonne may be levied, the ONGC proposal said.