After Left and SP, ONGC asks for windfall tax

Oil and Natural Gas Corp (ONGC) has favoured the imposition of a windfall profit tax (WPT) instead of the current mechanism of subsidy payouts to the state-owned oil marketing firms on an ad hoc basis. This means that ONGC is ready to pay higher taxes to the government (on account of incremental revenues from high crude oil prices) than the present system of making subsidy payouts (in the form of discounts on crude oil) to the OMCs.

ONGC, which is asked to meet part of revenue losses on sale of petrol, diesel, LPG and kerosene, wants a transparent system that may include raising cess on crude oil production and a new levy on prices above a certain level. “Whatever upside oil producers like ONGC get because of rise in international oil prices, that can be shared. We are for WPT,” ONGC chairman and managing director RS Sharma told reporters. “We are for a more transparent and equitable system of sharing upsides. The WPT should replace the current ad hoc subsidy sharing system and its proceeds together with cess should be used to subsidise fuel,” he added. ONGC last year paid Rs 5,821 crore as cess.

First, the Left parties and then the UPA government’s saviour Samajwadi Party (SP) had demanded a WPT on crude refiners and oil producers. But the government has yet to take a call on the issue.