Mumbai, May 12 -- Oil & Natural Gas Corporation (ONGC) rallied 6% to Rs 298.95 while Oil India surged 8.58% to Rs 495.70 on the BSE.

The government has reduced royalty on offshore crude oil production to 8% from 9.09%. Meanwhile, the royalty rate on natural gas production has been lowered to 8% from 10%. Additionally, royalty on onshore crude oil production lowered to 10% from 16.66%.

Royalty is the fee paid by oil and gas producers such as ONGC and Oil India to the government for extracting crude oil and natural gas from the country's reserves. This fee is typically calculated as a percentage of the market value of the extracted oil or gas.

The reduction in royalty rates is expected to enhance profitability and support higher investme...