The Indian Oil Corporation's refineries in the state may suffer losses because of the recent change in duty fee by the Assam government that may cost them a loss of INR 1900 crore a year from now on.

The refineries are already bearing the burden of additional sales tax on crude oil after the state government hiked it from 4 to 5% from June this year. On Wednesday, the United Workmen Union, Guwahati Refinery, slammed the government's decision of additional taxation and said if it is not revoked soon then the struggling refineries would face an adverse situation.

Mr Biren Kalita president of the union said that "While the Centre has restructured the duty fee by reducing customs duty on crude oil from five per cent to nil, the Assam government's decision to hike sales tax from 4% to 5% and additional entry tax of two per cent is ridiculous.”

According to a study of the union, the four refineries will lose INR 1891 crores in the coming fiscal because of extra entry tax and VAT. While Numaligarh Refinery will lose around INR 765 crore, Digboi Refinery will suffer a loss of almost INR 200 crore.

The union accused both the Centre and the state of turning a blind eye to business possibilities of the four refineries of the state. Mr Kalita added that "The Digboi Refinery is the country's oldest whereas the one in Guwahati was the first public sector refinery of IOC. But the future of the oil sector looks blur with no plan of increasing their production.”

(Sourced from TOI)