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It had also been provided that the discount offered by

upstream companies would not affect the royalty payable to the state governments.

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upstream companies would not affect the royalty payable to the state governments. Accordingly, upstream companies paid the royalty on pre-discount price during 2003-04 to 2007-08.

However, keeping in view representation made by the companies, statutory provisions and the opinion of the Law Ministry on the issue, the Petroleum Ministry on May 23, 2008 withdrew the provisions that the revenue of the state government in term of royalty on crude oil will not be affected by the discount given on crude oil prices.

Consequently, in terms of aforesaid directives, both companies--OIL and ONGC--started making payment of royalty to the state governments at actual (post discount) sale price from April 1, 2008.

The Assam government filed a writ petition with the Gauhati High Court asking OIL and ONGC to pay royalty on pre-discount prices.

The Petroleum Ministry on July 15, 2016 decided that in terms of the Supreme Court order on February 13, 2014, the OIL and ONGC will pay royalty to all similarly placed crude oil producing states at pre-discount price effective February 1, 2014 pending the outcome of the Special Leave Petition filed by the ONGC before the Supreme Court.

"With this agreement between the central and the state governments, all sides will withdraw the court cases," the chief minister said.

 

(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)

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