India’s biggest oil & gas company Oil & Natural Gas Corporation (ONGC) has urged the government to do away with windfall tax and instead take increased dividends resulting from bumper earnings due to a surge in global oil prices.

ONGC also supports a floor price of USD 10 per million British thermal units for natural gas in order to boost production from challenging areas, according to a report in PTI.

The state-run oil company reportedly told government officials that imposing a windfall tax while at the same time importing discounted Russian oil was unfair. The government saved Rs 35,000 crore by importing cheaper Russian oil and these savings should be invested back to increase domestic output, they reportedly said.

ONGC is of the view that companies should be allowed to make higher revenues and profits from increased oil and gas prices. The higher revenues will translate into higher dividends, which is a better way of addressing the questions of bumper profits and wealth distribution.

Under current guidelines, ONGC pays a minimum dividend of 30% of profit or 5% of net worth, whichever is higher.

The government owns almost 59% stake in ONGC and will get higher dividends if the windfall tax is removed, the company officials said. The move will boost the company’s price and valuation, ultimately benefiting the government.

The government on Friday cut the windfall profit tax on locally-produced crude oil in line with a fall in international rates, and reduced the levy on export of diesel and jet fuel (ATF) with effect from September 17.

The levy on the export of diesel was reduced to Rs 10 per litre from Rs 13.5. Also, the tax on Aviation Turbine Fuel (ATF) exports was cut to Rs 5 a litre from Rs 9 with effect from September 17, according to a finance ministry notification issued late Friday night.

International oil prices have fallen to six-month lows this month, leading to a reduction in the windfall profit tax.