Oil Industry Seeks Review or Abolition of OID Cess on Pre-NELP and Nomination Blocks

The oil and gas industry, represented by the Federation of Indian Petroleum Industry (FIPI), has requested the abolition or review of the Oil Industry Development (OID) cess on crude oil from nomination and pre-NELP blocks in the FY27 Union Budget. The 20% ad-valorem cess, introduced in 2016, is seen as excessive and adversely affecting domestic production and project viability, especially for mature fields requiring higher investment. The cess applies only to certain domestic blocks, unlike newer exploration areas, raising concerns about competitiveness and alignment with 'Make in India' and 'Atmanirbhar Bharat' goals.