India's oil minister on Tuesday favoured a proposal by explorers to cut a key levy linked to crude prices from the current 20 percent.
"I am recommending the demand of explorers to the finance ministry," Dharmendra Pradhan, minister of petroleum and natural gas, said at an industry event. "Cess has to be in line with oil market dynamics."
Indian explorers such as Oil and Natural Gas Corp (ONGC) have urged the government to levy cess at 8-10 percent of crude oil prices instead of the current 20 percent.
"We're are hopeful that the government will consider our demand sympathetically," said Dinesh K Sarraf, the chairman of ONGC, adding the company might have to pay a higher cess were crude oil prices to rise above $45 a barrel.
Global benchmark Brent crude was trading up 87 cents at $43.01 a barrel at 1354 GMT, after touching a session high of $43.18.
India earlier charged a cess of 4,500 rupees a tonne on oil production, amounting to $9 a barrel.
This was changed to 20 pct of oil prices in the budget for 2016/17.
(Reuters)
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