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Govt. considering bringing natural gas under GST regime: Petroleum Secretary
May 27, 2020
NEW DELHI, 27 May 2020: Mr Tarun Kapoor, Secretary, Ministry of Petroleum & Natural Gas, Govt of India, today said that the government is considering bringing natural gas under the GST to begin with as it would be difficult to bring the entire oil and gas sector immediately under it. Mr Kapoor added, "We want that whoever is in the sector has ease of operations. The first product which we are targeting is gas so if that happens that would be a good beginning and that is the direction we have to go."
Addressing a webinar on 'Future of Global Oil & Gas Prices & Policies for India', organised by FICCI, Mr Kapoor said, "The government is keen to invite more investments into the sector. We are looking at pricing freedom."
Highlighting the benefits of the decline in the international crude prices, Mr Kapoor said, "This situation is good for the country because we have huge oil imports and we could make good use of the low prices. We could buy crude to fill our strategic reserves as well. Indian markets are also coming gradually to its previous level so the demand will also increase."
Mr Kapoor further emphasised on the need of adopting biofuels. He said that government is also looking at options to increase the gas share in country's total energy mix. "We are very keen on increasing the gas share in the total energy mix in the country. Currently it is only 6.3 percent of the total primary energy of the country whereas globally it is 24 percent. We also want to move to biofuel," he said.
On the steps taken by the government to promote Make in India, Mr Kapoor said that all large purchases made by PSUs will be done through the domestic route so that the domestic industry also gets benefitted.
"We will come out with the list of products where domestic manufacturing is possible," added Mr Kapoor.
Mr Prashant Modi, Co-Chair, FICCI Hydrocarbons Committee and MD & CEO, Great Eastern Energy Corporation Ltd (GEECL) said that inclusion of hydrocarbon & natural gas in the GST regime will be a big help in the development of the sector.
Mr Dilip Chenoy, Secretary General, FICCI said that India is using this crisis as an opportunity by resetting various facets of the economy including its spending in the energy sector.
Mr Amar Nath, Joint Secretary (E & VO), Ministry of Petroleum & Natural Gas, GoI said, "We need to focus on areas where we can locally manufacture products and services. We are looking at 3 buckets of reforms 1). Optimize cost structure of our companies, 2). Make the sector more attractive, 3). Simplify procedures via self-certification. A draft digitalization policy for Indian E&P sector to be released soon."
Mr E S Ranganathan, MD, Indraprastha Gas Limited said, "Overall we expect demand in CGD sector to restore up to 70% level in next 3 months and it may take another 6 months for demand to reach pre-COVID levels."
Mr Subhash Kumar, Director (Finance), ONGC; Mr T Srinivasan, President & Head (Refinery & Marketing), Reliance Industries Limited and Mr Deepak Mahurkar, Partner & Leader, Oil & Gas Industry, PwC also shared their perspective on the oil and gas industry.