ONGC and Oil India Ltd made a payment of ₹ 300.64 crore and ₹ 1,149.24 crore respectively to the Assam Government, towards the differential royalty on the pre-discount price between the period February 1, 2014 till March 31, 2016 on Wednesday.
As per the statutory provisions, royalty on production of crude oil in Assam is paid by ONGC and OIL to the state government. From 2008-09, the royalty to all state governments including Assam was being paid on a post-discount price of crude oil realised by the two companies.
However, due to the litigation arising out of the loss of royalty to the state government, the Ministry of Petroleum and Natural Gas on July 15 decided that ONGC and OIL will pay royalty to all crude oil processing states at the pre-discount prices effective February 1, 2014.
“Injustice was being done to Assam due to political reasons in the payment of royalty,” said Dharmendra Pradhan, Ministry for State (Independent Charge) for Petroleum and Natural Gas in a statement.
He added that the differential royalty paid on Wednesday was Assam’s right. “The natural resources of a place belong to the people living there and hence, it was proper that full royalty should be paid to Assam for the oil explored there.