Gandhinagar, 14 February 2014

The Supreme Court of India has in its interim order asked Oil and Natural Gas Corporation(ONGC) to pay crude oil royalty to Gujarat on pre-discounted crude price. The court asked ONGC to pay royalty for present and future beginning from February 1.

Following this the state will start getting about Rs. 200 crore royalty per month. The state treasury will earn Rs. 2500 crore as crude oil royalty every year according to minister Saurabh Patel.

Minister Patel described this order as victory of the people of Gujarat. He said the verdict proves a point that central government was doing injustice to Gujarat.

He said Chief Minister Narendra Modi had taken this issue seriously and made representation before central government on this issue time and again. Finally, court has also approved Gujarat government’s version.

The minister said, generally crude oil royalty is paid as per the market price, but following April-2008 directive of central government, ONGC had started paying royalty through different method of pre-discounted price. Gujarat suffered huge loss of Rs. 9779.70 crore royalty as on 31 January 2014 and Rs. 3758.31 crore loss of penalty over unpaid royalty during same period.

The state government filed petition in the High Court in 2011. In its order on 30 November 2013, Gujarat High Court asked ONGC to pay pending amount in two months and pay royalty to state as per the previously existing system. ONGC had challenged this decision in Supreme Court.

Now Supreme Court has in its interim order asked ONGC to pay crude oil royalty to Gujarat government as per the previous system of royalty.