Finance Ministry turns down proposal to cut cess on crude output

In a blow to domestic crude oil producers, the Finance Ministry has rejected a proposal by the Petroleum Ministry to reduce cess on domestic crude production, according to government officials.

Currently, all domestic oil producers pay an oil cess of 20 per cent on all crude oil output. Upstream companies had sought relief on oil cess noting that low international crude prices had made it difficult for them to even meet operational expenses. The price of Brent crude fell to a low of $19.33 per barrel in April on the back of low demand due to the Covid-19 pandemic and a price war between oil-producing countries. The pride of Brent crude has since recovered and stabilised at between $40-45 per barrel over the past three months.