Run up to the Budget: Oil and gas sector
Tax Structure
|
Customs Duty
|
1999-00
|
2000-01
|
|
Item
|
(%)
|
(%)
|
|
Crude Oil
|
20
|
15
|
|
Diesel
|
30
|
25
|
|
Motor Spirit
|
30
|
25
|
|
Kerosene
|
0
|
0
|
|
Kerosene (parallel marketing)
|
30
|
35
|
|
LPG
|
10
|
10
|
|
Naphtha
|
5
|
5
|
|
Aviation Turbine Fuel (ATF)
|
30
|
25
|
|
Excise Duty
|
1999-00
|
2000-01
|
|
Item
|
(%)
|
(%)
|
|
Crude Oil
|
0
|
0
|
|
Diesel
|
16
|
16
|
|
Motor Spirit
|
32
|
32
|
|
Kerosene (parallel marketing)
|
8
|
8
|
|
LPG
|
8
|
8
|
|
Aviation Turbine Fuel (ATF)
|
16
|
16
|
Background
- The Government has decided to decontrol the
sector in phases by 2002.
- India's total consumption of crude oil (in terms
of refinery crude throughput) has increased from 68.5 mn tons in FY1998-99
to 86 mn tons in FY1999-2000. However, domestic production of crude oil in
the same period has gone down from 32.7 mn tons to 31.9 mn tons.
- In order to reduce the widening oil pool deficit,
the Government has increased the prices of petroleum and petro-products twice
in this fiscal year.
Previous year (FY 2000-01) budget announcements
The customs duty on crude oil was reduced from
20% to 15%. The same on petro-products was reduced from 30% to 25%.
Pre-budget Wish List
- Confederation of Indian Industry (CII) has asked
for the removal of the 4% Special Additional Duty (SAD) on project imports
of refineries.
- The Petroleum Ministry has asked for infrastructure
status of refineries and imposition of the highest slab of customs duty on
naphtha for non-power and non-fertiliser consumers.
- The private players have demanded that they
should be granted marketing rights of petro-products
Expectations from the budget
Petroleum and petro-products form
a significant portion of customs revenues. Considering that growth rate of customs
duty collections have declined substantially in this fiscal year, the Government
is unlikely to reduce the customs duty on petroleum and petro-products.
Key Players
Indian Oil Corporation , Bharat Petroleum, Hindustan
Petroleum, Kochi Refineries, Chennai Petroleum Corporation, Manglore Refineries
and Petrochemicals, Reliance Petroleum etc.
Rediff-Dun & Bradstreet Budget Impact Analysis
Budget 2001
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