New Delhi, July 26: Domestic oil producers ONGC, Oil India and Cairn India have asked the finance ministry to review the cess on crude oil as the 20 per cent ad valorem duty, which replaced a fixed rate of Rs 4,500 per tonne in this year's budget, had increased their burden.

In a representation to the government, the oil companies said Rs 4,500 per tonne equalled to 20 per cent ad valorem duty when oil price crossed $44 per barrel. However, they have to pay more now because oil prices are ruling higher.

The cess was Rs 900 per tonne when India opened up its economy in 1991 and was doubled to Rs 1,800 in 2002. In 2006, it was hiked to Rs 2,500 per tonne when global prices stood at $60 per barrel and increased to Rs 4,500 per tonne in 2012 when pries were over $100 per barrel.

Industry officials said the levy translated into no more than 10 per cent of the oil prices even when the rates were at their peak.

However, when prices slumped to a decade low, raising concerns over fresh investments in exploration, finance minister Arun Jaitley proposed to shift to an ad valorem rate of 20 per cent in the budget. The move was meant to offer relief to the upstream firms.

ONGC and other upstream players have sought a reduction in cess to 8-10 per cent as the purpose of the budget exercise to rationalise the cess has been defeated.