New Delhi, Jan. 12: A spike in global crude prices following a production cut by oil cartel Opec has led state-owned explorer ONGC and Oil India and private explorer Cairn India to urge the finance ministry to review the crude cess as the 20 per cent ad valorem duty has increased their burden.

The producers want the government to cut the cess to 8 per cent of the price they realise on the sale of domestically produced crude.

Finance minister Arun Jaitley in budget 2016-17 had converted Rs 4,500 per tonne fixed cess on crude to 20 per cent ad valorem. The producers said the switchover from fixed to ad valorem rates had turned things from bad to worse.

Oil and gas industry association PetroFed said there was an urgent need to reconsider the issue and provide the much-needed relief to the domestic oil producers. A reduction in cess rate will help to expeditiously increase production, meet the vision of Make in India and enhance energy security.