PESHAWAR, Nov 19: Federal government has started disbursing royalty on crude oil to NWFP accepting the provincial government’s stand on the payment issue, official sources told Dawn here on Saturday.

In its budget for the current financial year, NWFP government has laid a claim to Rs52.31m as its legitimate share on account of royalty on crude oil — being produced at the Shakkar Darra oil producing plant near Kohat.

According to official sources, accepting the provincial government’s stand federal government has started paying royalty on crude oil to NWFP.

The NWFP government, said the sources, had laid claim on royalty on crude oil — against the Shakkar Darra crude oil productions — in line with the 1997 National Finance Commission award’s recommendations over the issue.

The 1997 NFC award included federal transfers (to provinces) on the basis of the criterion adopted in the 1990 award, which, said the sources, apart from payment of royalty and excise duty on natural gas to the provinces possessing the assets, covers payment of net hydel profit and royalty on crude oil.

Though a negligible amount had been paid to the province on account of royalty on crude oil, opening of the account, said the sources, appeared to be an acknowledgement of the province’s stand.

A sum of around Rs5m, according to the sources, has so far been paid to the province under the said head and the provincial authorities concerned appeared to be optimistic about getting the amount the provincial government had laid claim on under its current financial year’s budget document.