NEW DELHI: The government is readying a lifeline for oil producers such as ONGC and Oil India as the chaos in the global oil market deepened on Wednesday, with International benchmark Brent dipping just below $16, the lowest since 1999, before settling at $21.16.Government sources said the oil ministry has proposed a set of measures to help domestic oil producers tide over the oil price crash that has led them to lose money heavily on each barrel they produce and will turn their projects into white elephants.The options on the table at the “highest levels” of the government include a graded tax relief, soft loan from Oil Industry Development Board’s corpus created from cess on domestic oil production and pricing at par with the landed cost of imported crude. The department of public enterprises also reviewed the situation on Wednesday as part of the exercise.A relief package has become crucial for the survival of producers since the price crash since March has turned oil production into a loss-making proposition. For example, the total cost of a barrel of oil produced by ONGC works out to $45 after including royalty , cess and sundry other levies. So at Wednesday’s closing price of Brent, the company will actually end up paying from its pocket, affecting its dividend and corporate tax payout to the government.“Hundred per cent of 0 is less than 50 per cent of 10. That should be the government’s approach. ONGC has given Rs 3.11 lakh crore as fuel subsidy when prices were high. It has paid over Rs 10 lakh crore to the exchequer as taxes and dividend. Now we are only asking for tax relief below $45/barrel as a temporary measure,” a company executive told TOI.ONGC is also losing Rs 6,000 crore annually on gas due to a pricing formula based on benchmarks in surplus markets. While it costs $3.75 to produce each unit, the current price is $2.39.ONGC, sources said, has asked the government to abolish oil development cess if price realized by producers is less than USD 45 per barrel. It also wants royalty that the central government charges on oil and gas produced from the offshore area to be waived.With the oil market set to dive further due to demand shock and storage space fast running out, ONGC is also looking at pruning its capex of around Rs 32,000 crore by 5-6% as the company prioritises projects.ONGC pays 10-12.5 per cent royalty to the Centre on oil produced from offshore areas. State governments charge 20% royalty on the price of oil produced from onland fields. Then there is 20 per cent ad-valorem oil industry development (OID) cess on the price that producers get. OID cess has increased from $3 to $13 over the years and causing financial stress to current and new projects. The cess is levied on oil produced as excise duty under the Oil Industries (Development) Act of 1974. The cess is being levied on crude oil from nominated blocks and pre-NELP exploratory blocks only.The OID cess was raised from Rs 2,500 per tonne to Rs 4,500 per tonne in March 2012. The price of the Indian basket of crude oil stood at around USD 110 per barrel then.With the fall in global crude oil prices in mid-2014, companies were asked for reducing the levy and converting it into 8-10 per cent ad-valorem. The government had changed the levy of the cess to 20 per cent ad-valorem in March 2016.