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State seeks 20 pc hike in crude royalty

By Spl Correspondent
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NEW DELHI, June 9 � Faced with piling losses on account of underpayment of royalty, Assam has sought a 20 per cent hike, subject to certain conditions, from the Centre.

The Assam Government�s wishlist was placed before Union Finance Minister Arun Jaitley during a pre-Budget meeting with the States held here today. Chief Minister Tarun Gogoi who also holds the Finance portfolio, was represented by State Power and Industries Minister, Pradyut Bordoloi.

�Upstream companies like ONGC and OIL engaged in exploration of crude oil are liable to pay royalty on production of crude oil at 20 per cent on well head price, subject to certain deductions, to the States. ONGC and OIL are also liable to pay VAT at 5 per cent on the sale of crude oil,� the State Government�s presentation said.

�We have been selling oil at a discounted price leading to a loss of Rs 10,000 crore. We want royalty based on the market price,� Bordoloi said, briefing newsmen.

A Special Category State like Assam cannot afford such a huge loss of revenue. The oil producing States like Assam should not be denied the benefits of their natural resources and made to compensate for the under-recoveries from the Central Oil Marketing PSUs, the presentation said.

There has been a long simmering resentment in the State that Assam has not been getting its due share of benefits from its natural resources, Bordoloi said, adding that Gujarat strongly supported Assam.

The Assam Government has further pleaded that the 50 per cent excise duty exemption allowed to the refineries in the State should be continued.

Assam also complained that the Union Finance Ministry sometimes refuses to sanction the State Government�s plea to go to Open Market Borrowings on the ground that the State Government has considerable cash balance in hand.

Denial of the mandatory approval by Ministry of Finance to raise open market borrowing by a State amounts to reduction of plan resources of the State to that extent, Dispur rued.

The State Power Minister further said that the State Government had presented a wishlist to the Centre for inclusion in the Union Budget. They include a plea for completion of the ongoing Central projects.

There are a few important central projects being implemented in Assam. Unfortunately, most of them have suffered from time overruns. Some of the projects named included Gauge Conversion work, Bogibeel-rail-cum-road Bridge, New B G Line from Tetelia to Byrnihat, Assam Gas Cracker project, bridge from Sadiya to Dhola among others.

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State seeks 20 pc hike in crude royalty

NEW DELHI, June 9 � Faced with piling losses on account of underpayment of royalty, Assam has sought a 20 per cent hike, subject to certain conditions, from the Centre.

The Assam Government�s wishlist was placed before Union Finance Minister Arun Jaitley during a pre-Budget meeting with the States held here today. Chief Minister Tarun Gogoi who also holds the Finance portfolio, was represented by State Power and Industries Minister, Pradyut Bordoloi.

�Upstream companies like ONGC and OIL engaged in exploration of crude oil are liable to pay royalty on production of crude oil at 20 per cent on well head price, subject to certain deductions, to the States. ONGC and OIL are also liable to pay VAT at 5 per cent on the sale of crude oil,� the State Government�s presentation said.

�We have been selling oil at a discounted price leading to a loss of Rs 10,000 crore. We want royalty based on the market price,� Bordoloi said, briefing newsmen.

A Special Category State like Assam cannot afford such a huge loss of revenue. The oil producing States like Assam should not be denied the benefits of their natural resources and made to compensate for the under-recoveries from the Central Oil Marketing PSUs, the presentation said.

There has been a long simmering resentment in the State that Assam has not been getting its due share of benefits from its natural resources, Bordoloi said, adding that Gujarat strongly supported Assam.

The Assam Government has further pleaded that the 50 per cent excise duty exemption allowed to the refineries in the State should be continued.

Assam also complained that the Union Finance Ministry sometimes refuses to sanction the State Government�s plea to go to Open Market Borrowings on the ground that the State Government has considerable cash balance in hand.

Denial of the mandatory approval by Ministry of Finance to raise open market borrowing by a State amounts to reduction of plan resources of the State to that extent, Dispur rued.

The State Power Minister further said that the State Government had presented a wishlist to the Centre for inclusion in the Union Budget. They include a plea for completion of the ongoing Central projects.

There are a few important central projects being implemented in Assam. Unfortunately, most of them have suffered from time overruns. Some of the projects named included Gauge Conversion work, Bogibeel-rail-cum-road Bridge, New B G Line from Tetelia to Byrnihat, Assam Gas Cracker project, bridge from Sadiya to Dhola among others.

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