India’s Oil Ministry submits list of demands for consideration in budget talks

India’s Oil Minister S. Jaipal Reddy reportedly met with Minister Pranab Mukherjee to ask for the imposition of additional excise duty of Rs 80,000 (US$1,633) on diesel vehicles to “discourage the dieselization of the economy” and bring in additional revenue which can be used for fuel subsidy. Reddy also asked for a 10-year tax holiday for oil and gas refineries. The two requests are part of a long list of proposals for the oil and gas sector which Reddy submitted for consideration in the budget discussions for 2012-2013. Another item in the oil ministry’s list is the scrapping of the 5% customs or import duty on liquefied natural gas (LNG), which will reduce the cost of imported fuel for fertilizer and power plants. The oil ministry also reiterated its demand that natural gas and LNG be given “declared goods” status so that the two environment-friendly fuel can have a uniform sales tax of 5%, instead of the current system which levies a 12.5% sales tax in Gujarat and Maharashtra, and 20% in Assam. (January 27, 2012)