Budget has met demands of oil industry

New Delhi, Feb 28 (UNI) Petroleum and Natural Gas Minister Murli Deora lauded the Union Budget 2007-08 stating that it was well balanced and has reduced excise duty on prices of petrol and diesel.

While Ravi Mahajan, Partner, Oil and Gas Practice, Ernst&Young said the oil and gas industry had several expectations from the Union Budget 2007, but the Government has offered a mixed set of proposals to the industry.

The proposal to extend service tax to services rendered for exploration of oil and gas will impact the upstream industry, though the proposed reduction in excise duty of petrol and diesel from 8 to 6 per cent would benefit the oil marketing companies.

Separately, in line with the recent gas discoveries in India, the tax concessions offered for cross country natural gas distribution networks would provide a much needed impetus for laying pipelines and related infrastructure across the country, Mr Mahajan said.

''Finance Minister must be congratulated for the well balanced Budget and with focus on Aam Admi. In the oil sector, he has kept his promise and reduced excise duty on petrol and diesel. When we reduced the prices of petrol and diesel on February 15, the Finance Minister had committed to partly meet the reduction through changes in duties,'' Mr Deora said after the Budget.

He said he was happy to note that the Finance Minister has fulfilled the assurance and met the long pending demand of the oil industry. Elimination of excise duty on bio diesel will give a boost to environment friendly fuels.

The oil industry is also happy on the reduction of CST by 1 per cent. This will assist in inter-State movements of petroleum products in a cost effective manner.

Gas transport infrastructure will rapidly expand with grant of infrastructure status under section 80 I. This will enthuse companies to come forward in building gas networks in the country, the Petroleum Minister said.

UNI