Oil and Natural Gas Corp (ONGC) has favoured the imposition of a windfall profit tax 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 on an ad hoc basis 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 gets because of rise in international oil pricesthat can be shared. We are for WPT,? ONGC chairman and managing director RS Sharma told reporters. ONGC gets international prices for oil it produces but is asked to bear part of fuel subsidy. In April-June quarter, it saw the subsidy payout rising nearly three-fold to Rs 9,811 crore as it got a record $125.84 per barrel price.
Sharma said the cess of Rs 2,500 per ton or $ 8 can be converted into ad valorem rate that will rise or fall with change in oil prices. Besides, a WPT can be levied after ensuring that oil producers got a reasonable rate of return.