Oil India claims unfair treatment on tax

Vol 8, PW 14 (06 Oct 04) News in Brief

Oil India is claiming unfair treatment by Delhi over the payment of taxes and transport charges on crude sales to northeastern refineries and subsidies on LPG and kerosene.

On 22nd September, Oil India chairman RK Dutta wrote a sharp letter to oil secretary Sushil Tripathi protesting at the double subsidy that no other oil company is bearing. Duttas letter reflects long-standing disquiet at Oil India over the sales tax and transport costs that it pays on crude supplied to refineries in the northeast.

According to Oil India, this amounts to Rs190cr ($42m) every year. Dutta wants northeastern refineries to pay the sales tax and transport costs for the crude they buy.

Oil India sells all its crude to northeastern refineries while ONGC sells only 6% of its production in the northeast. Dutta also complains about the subsidy that Oil India like other state-owned oil companies must pay to ensure that LPG and kerosene is sold at below market price.

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