In a post on social media platform X, Puri wrote, “This landmark decision will be a major step toward regulatory clarity. Following the historic 2025 amendments to the ORD Act & PNG Rules, the Government has rationalized royalty rates and methodologies for Crude Oil, Natural Gas, and Casing Head Condensate. The revised Schedule removes long-standing inconsistencies across regimes to ensure a stable, predictable, and investor-aligned framework for India’s upstream sector.”
In simple terms, this means that the Centre has changed the rules for how companies pay the government for extracting natural resources such as crude oil, natural gas and casing head condensate — a light liquid hydrocarbon that separates from natural gas during production.
This comes at a time when crude prices have shot up as a result of the West Asia war — a contributing factor to Prime Minister Narendra Modi’s appeal Indians to conserve petrol and diesel. The announcement can be seen as an attempt to encourage domestic oil production, reduce import dependence and move towards long-term energy security.
What this means:
In the oil and gas industry, the ‘upstream’ sector refers to companies which look for underwater or underground oil and gas fields, drill exploratory wells, and then operate these wells.
For the extraction of every barrel of oil or every cubic meter of natural gas, these companies pay a ‘royalty’ fee to the government. Until today, the royalty was different for different companies and depended on when the contract was signed.
But now, the Union government has standardised these rates by under the Oilfields (Regulation and Development) Amendment Act, 2025 and Petroleum and Natural Gas Rules, which established new methodologies for royalty on crude oil, natural gas, and casing head condensate.
“This decision is a culmination of a decade-long effort to modernize our regulatory landscape by replacing complexity with consistency to fuel India’s energy future,” Puri wrote.