New Delhi, July 22: State-owned Oil and Natural Gas Corporation (ONGC) and Oil India will have to shell out about Rs 1,400 crore as royalty to crude oil producing states such as Assam, Gujarat, Andhra Pradesh, Rajasthan and Tamil Nadu at gross crude rates and not the net rate they actually realise.

"We have to pay Rs 392.50 crore to implement the order to pay royalty to the state governments on revised terms from a back date of February 2014," a senior ONGC official said.

Of the Rs 392.50 crore, about Rs 300 crore will go to Assam and another Rs 91.86 crore to Andhra Pradesh. ONGC is already paying royalty at revised terms to Gujarat.

For Oil India, which produces most of its crude in Assam, the liability will be Rs 1,100-1,150 crore.

"It has been decided that ONGC and Oil India will pay royalty to all similarly placed crude oil producing states at pre-discount prices from February 1, 2014, pending the outcome of the special leave appeal filed by ONGC before the Supreme Court," a petroleum ministry order said.

The decision now means the companies will have to pay royalty to states based on their gross realisation on crude sales and not on the net price.

According to a government mandate, ONGC and Oil India offer discounts on crude oil to make up for part of the losses refiners suffer on selling LPG and kerosene at government controlled rates. These discounts also covered diesel till October 2014 when the price of the fuel was deregulated.

So, ONGC and Oil India will raise a gross bill based on the prevailing international oil price even if their actual realisation is less than that after accounting for the subsidy discount.