Millennium Post

ONGC set to appeal in Supreme Court against Gujarat HC order

Oil and Natural Gas Corp (ONGC) on Tuesday said that it would appeal in the Supreme Court against a Gujarat High Court order asking it to pay Rs 10,000 crore in past royalty dues, saying it cannot pay the levy on revenue it hasn't earned. The Gujarat High Court had on 30 November directed ONGC to pay royalty to the state government on the gross bill price of crude oil.

The company, as per government  directive, pays royalty on the net realised from refiners after allowing for fuel subsidy discounts. 'ONGC is in the process of filing an appeal in Supreme Court of India against the order of Gujarat High Court and making Union Government as party,' the company said. As per the government directive, ONGC offers discounts on crude oil to make up part of the losses refiners suffer on selling diesel, cooking gas  and kerosene at state controlled rates.

 ONGC paid royalty on output from offshore fields to the central government at post-discount sale price while it paid state governments for crude from onshore fields at pre-discount sale price. 'This has resulted in royalty payout to the state governments in excess of the statutory limit of 20 per cent of the price realised by ONGC, as stipulated in the Oilfields (Regulation and Development) Act, 1948. In fact it was as high as 49.8 per cent of realised price on the gross billing,' it said.
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