PC to consider keeping E

New Delhi, Mar 6 (UNI) Finance Minister P Chidambaram today said he would consider keeping exploration and production activities in the oil sector, such as drilling and survey, out of the service tax net, official sources said.

At a meeting with Petroleum Minister Murli Deora, Mr Chidambaram, however, agreed to provide working capital from the Oil Industry Development Board to the three oil marketing companies-- IOC, BPCL and HPCL-- as per their needs, Petroleum Ministry sources said.

In Budget 2006-07, the cess on oil producing companies that goes into the Board was increased from Rs 1,800 to Rs 2,500 per tonne.

Mr Chidambaram also agreed to provide before March 15 the two tranches of Rs 5,750 crore each for the oil bonds, approved at a Cabinet meeting recently, for meeting the financial deficit of oil marketing companies.

Mr Deora also demanded that oil pipeline sector be given an infrastructure status.

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