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Another lesson from the ONGC fiasco: the government doesn’t think twice to drive a shaft through private investors if it means flushing money down the NREGA. The recent budget increased the cess on oil production from Rs 2,500 per tonne to Rs 4,500 – a body blow to the oil producers like [stockquote]ONGC[/stockquote], [stockquote]OIL[/stockquote] and [stockquote]CAIRN[/stockquote]. ONGC, which alone produces 24.5 million tonnes of oil annually, is going to see its annual cess expenditure go up by Rs 4,600 crore. Oil India, which is nearing 4 million tonnes in annual crude oil production, will take a hit of Rs 700 crore. The Cairn-ONGC joint venture, which has been producing around 6.4 million tonnes per annum from the Rajasthan block, targets to reach 9-MTPA level by end-March. The increase in cess will add a burden of Rs 1,700 crore for the JV. (ET)
Be careful out there!