CLSA says Oil India to get modest boost from crude royalty hike, ONGC to hurt slightly

Oil and Natural Gas

11/06/2026 05:38

** India raises royalty on onshore crude oil production, which CLSA sees as a positive for Oil India OILI.NS but slightly negative for ONGC ONGC.NS, largely due to firm's higher exposure to onshore crude production  
** "This royalty flip-flop may be seen as an irritant and may make investors extrapolate more negative government action, but we would disagree (with that opinion)," says CLSA
** Despite a sharp hike in international crude oil prices, India has cut royalty rates for the sector, not introduced any windfall tax and allowed realisations on new well gas to jump without tinkering with the formula - CLSA 
     ** The revised crude royalty rate is at about 13.33% from earlier ~10% but is still below the pre-May level of 16.67%, while onshore gas royalty has been reduced to 7.27%, continuing a downward trend
** On the day, shares of OILI trade flat, ONGC rise 1.3%
** YTD, ONGC up ~8% while OILI trades 0.35% up 



 (Reporting by Urvi Dugar in Bengaluru)
 ((UrviManoj.Dugar@thomsonreuters.com;))