The Gujarat Government has once again raised the pending issue of royalty payment of Rs 10,000 crore by the oil major ONGC to the State.
At a meeting with Union Minister of State for Petroleum and Natural Gas, Dharmendra Pradhan, Gujarat Energy Minister Saurabh Patel on Thursday demanded immediate resolution of the matter, which has been pending since 2011.
During the meeting, Patel informed the newly appointed Union Minister about the ‘injustice’ done by the previous UPA-led Government regarding the non-payment of crude oil royalty by the central PSU, which has extensive exploration activities in Gujarat.
The Central policy is in place regarding the payment of royalty to the State for extraction of minerals, including crude oil. Normally, such royalty is paid on the basis of the prevailing market price of the respective mineral.
“But since April 2008, ONGC has been making payments on the basis of post-subsidy price instead of the market price. The Gujarat High Court, in its order, had directed ONGC to pay the crude oil royalty at the market price effective from April 2008 onwards. It had also directed the PSU to honour the order within a time limit of two months,” Patel informed the Union Minister.
As per the Government estimates, the amount of royalty dues from ONGC works out to be around Rs 10,000 crore.
Patel demanded immediate resolution of the issue from the newly appointed Union Government under the leadership of Narendra Modi.
Under the Oil Field Act, the PSU is required to pay 20 per cent royalty of the market value of crude oil it extracts from its oil exploration fields in the State.