Oil & gas royalty rejig: What govt big upstream reform means

NEW DELHI: The government announced the rationalisation of royalty rates and methodologies for crude oil, natural gas and casing head condensate (a light hydrocarbon liquid obtained during gas production), in a move aimed at simplifying regulations and boosting India’s upstream energy sector.

Union petroleum and natural gas minister Hardeep Singh Puri said the decision would bring greater clarity and consistency to India’s oil and gas regime.

Sharing a post on X, Puri said, "In a big boost for the country’s Upstream Sector, rationalisation of royalty under the ORD Act marks a new era for our Oil & Gas regimes by eliminating inconsistencies and driving growth in the upstream sector under the leadership of PM Narendra Modi."

"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 & methodologies for Crude Oil, Natural Gas, and Casing Head Condensate," he said.


The revised Schedule removes long-standing inconsistencies across regimes to ensure a stable, predictable, and investor-aligned framework for India’s upstream sector, Puri said.

Further, calling it part of a long-term reform effort, the minister added, "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."

Key highlights of the reforms

According to the ministry, the revised schedule under Section 6A of the ORD Act removes long-standing inconsistencies across multiple contractual and policy regimes, creating a more stable and predictable framework for India’s upstream energy sector.

The government said the reforms introduce lower and rationalised royalty rates across different regimes for crude oil, natural gas and casing head condensate.

The move is aimed at bringing greater uniformity to India’s oil and gas sector by eliminating variations in royalty structures that existed under different contracts and policies.

The ministry said the new framework is designed to provide certainty and confidence to investors, enabling long-term planning and encouraging fresh investments in exploration and production activities.

It also described the reforms as an investor-aligned approach that seeks to create a transparent, fair and globally competitive regulatory regime.

The government said the reforms are intended to accelerate exploration and production (E&P) activities, increase domestic output and strengthen India’s energy security goals.



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