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Crude royalty con rap on oil firms

business Updated: Jun 08, 2011 18:17 IST

Oil PSUs such as Oil and Natural Gas Corporation Ltd (ONGC) and Oil India Limited (OIL) suppressed crude production figures to deny Assam Rs 856.99 crore in royalty for five years.

A Comptroller and Auditor General (CAG) report tabled in the assembly here on Wednesday pointed this out while partly blaming the Assam government for failure to enforce payment correctly.

The CAG report of revenue receipts for the fiscal ending March 2010 said OIL paid Rs 634.94 crore less in royalty while ONGC paid Rs 215.12 crore less. The Assam government, on the other hand, failed to earn Rs 10.48 crore as “differential royalty” from the Oil Industry Development Board (OIDB).

Though the ‘missing royalty’ figure pertained to five years from April 2004 to March 2009, the CAG report specifically noted that the Assam government was deprived Rs 524.04 crore in just one year (2008-09 fiscal) due to non-payment of royalty on deducted discount on well-head prices of crude distributed to oil marketing companies. Of this, OIL accounted for Rs 477.99 crore while ONGC’s share was Rs 47.05 crore.

The report further said OIL ‘suppressed’ its production to 2.27 kiloliters of crude oil and condensate between April 2004 and March 2009. The resultant revenue lost was Rs 72.40 crore. OIL, the report said, also suppressed gas production figures during the same period leading to revenue loss of Rs 49.40 crore.

Similarly, ONGC suppressed figures related to production of 1.35 lakh metric tons of crude oil during the same period (2004-2009), leading to loss of Rs 46.68 crore in revenue to the Assam government. This included interest of Rs 9.54 crore, the CAG report added.

ONGCL also made a short payment of Rs 119.01 crore during 2004-05 and 2008-09 “in respect of oil marketing companies determining crude price on a lower side” compared to the price fixed by the Navaratna company’s commercial wing.