NEW DELHI, Aug 26 - In a boost to oil producing States, barring Assam, the Cabinet Committee on Economic Affairs (CCEA) on Tuesday sanctioned the proposal for payment of differential royalty to State Governments concerned in respect of 28 discovered fields, which were awarded by the Government to different companies during the years 1994-95, 2001 and 2004.
The States which are likely to benefit include Arunachal Pradesh and Gujarat. The payment shall be through budgetary allocation, instead of through Oil Industry Development Board (OIDB) fund from the year 2015-16 onwards. Assam is, however, unlikely to get any immediate benefit.
The meeting, chaired by Prime Minister Narendra Modi, cleared the proposal, which will have a financial implication on government budgetary allocation, while the outflow from OIDB will be reduced accordingly. The expected expenditure for the year 2015-16 has been estimated at Rs 56 crore, comprising Rs 30 crore for Arunachal Pradesh and Rs 26 crore for Gujarat (assuming average crude oil price of US$ 50/barrel and 1 US$ being equivalent to Rs 60).
Official sources said the payment would be based on the difference between the rates of royalty as per provisions contained in respective Production Sharing Contracts (PSCs) and the notified rate of royalty on crude oil production.
