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CAG detects evasion by ONGC, OIL

By R Dutta Choudhury

GUWAHATI, Sept 15 � At a time when the Assam Government is requesting the Centre for enhancement of the oil royalty, loss of hundreds of crores of rupees by the Government because of short payment of royalty and evasion has been detected by the Comptroller and Auditor General of India (CAG). Similarly, loss of revenue on other mineral products has also been detected by the CAG.

A report of the CAG said that suppression of production of crude oil and natural gas by the Oil India Limited (OIL) and Oil and Natural Gas Corporation Limited (ONGCL) led to short payment of royalty and interest amounting to Rs 168 crore while, royalty of Rs 119 crore including interest was evaded by the ONGCL by computation of lower price of oil.

The report said that failure of the Government to enforce payment of royalty on natural gas at well head price resulted in short realization of Rs 24.56 crore and adoption of incorrect method of determination of royalty payable on natural gas resulted in loss of revenue amounting to Rs 11.97 crore.

Giving a detailed account of the lapses which led to the loss of revenue, the CAG said that the Geology and Mining Department of the State Government realizes revenue from major and minor minerals and the review revealed that the Department failed to effectively perform its role to ensure optimum exploration of the state's vital mineral resources. There is urgent need for resolving the contentious issues soon and there is need for strong internal control mechanism.

The report said that cross verification of the returns as well as the website of the Ministry of Petroleum and Natural Gas disclosed that the OIL suppressed production of 2.27 lakh KL of crude oil and condensate and 21,317.92 lakh SCUM natural gas during the period from 2004-05 to 2008-09 involving royalty of Rs 121.80 crore including interest. Similarly, the ONGCL evaded royalty of Rs 46.68 crore by suppressing production of 1.35 MT of crude oil.

The CAG revealed that during the period from 2004-05 to 2008-09 the ONGCL paid royalty in respect of oil marketing companies determining crude price on lower price compared to price fixed by the commercial group of the ONGCL resulting in short payment of Rs 119.01 crore including interest.

Moreover, during the period from 2007-08 to 2008-09, the OIL and ONGCL paid royalty on different rates based on the selling price to the consumers instead of payment at well head price.

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CAG detects evasion by ONGC, OIL

GUWAHATI, Sept 15 � At a time when the Assam Government is requesting the Centre for enhancement of the oil royalty, loss of hundreds of crores of rupees by the Government because of short payment of royalty and evasion has been detected by the Comptroller and Auditor General of India (CAG). Similarly, loss of revenue on other mineral products has also been detected by the CAG.

A report of the CAG said that suppression of production of crude oil and natural gas by the Oil India Limited (OIL) and Oil and Natural Gas Corporation Limited (ONGCL) led to short payment of royalty and interest amounting to Rs 168 crore while, royalty of Rs 119 crore including interest was evaded by the ONGCL by computation of lower price of oil.

The report said that failure of the Government to enforce payment of royalty on natural gas at well head price resulted in short realization of Rs 24.56 crore and adoption of incorrect method of determination of royalty payable on natural gas resulted in loss of revenue amounting to Rs 11.97 crore.

Giving a detailed account of the lapses which led to the loss of revenue, the CAG said that the Geology and Mining Department of the State Government realizes revenue from major and minor minerals and the review revealed that the Department failed to effectively perform its role to ensure optimum exploration of the state's vital mineral resources. There is urgent need for resolving the contentious issues soon and there is need for strong internal control mechanism.

The report said that cross verification of the returns as well as the website of the Ministry of Petroleum and Natural Gas disclosed that the OIL suppressed production of 2.27 lakh KL of crude oil and condensate and 21,317.92 lakh SCUM natural gas during the period from 2004-05 to 2008-09 involving royalty of Rs 121.80 crore including interest. Similarly, the ONGCL evaded royalty of Rs 46.68 crore by suppressing production of 1.35 MT of crude oil.

The CAG revealed that during the period from 2004-05 to 2008-09 the ONGCL paid royalty in respect of oil marketing companies determining crude price on lower price compared to price fixed by the commercial group of the ONGCL resulting in short payment of Rs 119.01 crore including interest.

Moreover, during the period from 2007-08 to 2008-09, the OIL and ONGCL paid royalty on different rates based on the selling price to the consumers instead of payment at well head price.