The government has revised its royalty framework for crude oil production by restoring the effective royalty rate applicable to onland nomination blocks and areas awarded prior to the New Exploration Licensing Policy (NELP).
The change was notified through a gazette notification dated June 4 and modifies a key provision introduced during the royalty rationalisation exercise announced in May.
According to the notification, the effective royalty rate on crude oil produced from onland nomination blocks and pre-NELP areas has been restored to 16.66%.
The royalty for these blocks will now be calculated on a cum-royalty basis.
The latest notification reverses the decision announced on May 8, under which the effective royalty rate for crude oil produced from these blocks had been reduced to 10%.
The government has retained the revised royalty structure announced in May for other categories of oil and gas fields.
Under the May 8 framework, the royalty rate for offshore crude oil production was reduced from 9.09% to 8%, while natural gas royalty was lowered from 10% to 8%.
The government had also introduced concessional royalty rates for production from deepwater and ultra-deepwater fields.
The royalty rate for onland NELP blocks remains unchanged at 10% and will continue to be calculated on an ex-royalty basis.
Similarly, royalty payments for offshore blocks will continue to be computed on an ex-royalty basis under the existing framework.
While announcing the royalty rationalisation framework in May, the government stated that the objective was to address inconsistencies across different licensing regimes and provide greater regulatory clarity for the upstream oil and gas sector.
The revised framework was aimed at creating a more uniform and predictable structure for exploration and production activities.
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With the latest notification, the government has restored the effective royalty rate on crude oil production from onland nomination and pre-NELP blocks to 16.66%. Other royalty revisions announced under the May 8 rationalisation framework remain unchanged.
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Published on: Jun 11, 2026, 3:55 PM IST
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