You are here » Home » Chat Home » What is required of FM Jaitley in Budget 2017 to boost India's oil & gas sector?

CHAT

CHAT CLOSED. READ TRANSCRIPT BELOW

  • MODERATOR:

    Hello and welcome to a webchat with Deepak Mahurkar, pertner & leader (oil & gas), PwC, on what is required of FM Jaitley in Budget 2017 to boost India's oil & gas sector


    DEEPAK MAHURKAR:

    Hello, everyone


  • Y

    YOGESH SOMKUNWAR

    Is applicability of the Goods and Services Tax (GST) on key petroleum products a good sign?

    DEEPAK MAHURKAR

    GST wouldn't apply to transport and subsidized fuels, and gas. Other refinery fuels will be in the ambit. The imperfect GST will be a burden - from both - the administrative and cost to consumers perspective.


  • P

    PRAKASH

    Should cess on crude oil be reduced from the current 20%? Do you think the finance minister will announce something like that in Budget 2017?

    DEEPAK MAHURKAR

    The OIDB Cess proved to be an unbearable cost during low crude oil price regime. Also, the feedback is that the Cess is not utilized for Oil industry development for which it was created. It will be good if the fiscal balance is maintained for both the investor and the GoI.


  • R

    ROHIT

    What should be the dollar guidance assumed at?

    DEEPAK MAHURKAR

    In the near and mid term dollar is expected to remain strong. Any rise in Crude oil prices will further weaken Rupee.


  • S

    SIMRAN JEET KAUR

    Sir, OPEC said that it is nearing its target cut of 1.8 million barrels of crude oil per day which is resulting in oil price rise in Asia. Can we expect some measures to check the rising prices or will there be a cut in subsidies in the Budget?

    DEEPAK MAHURKAR

    While difficult to expect the budget to deal with such dynamic matters, we expect the exchequer to reduce tax rates with any crude prices going up over the year. The taxes were hiked when oil prices went down. Also, a free market pricing and strong competition in retail will further better ability of consumers to bear with crude prices increase.


  • P

    PRATYUSH RAJ

    Should we have a sweeter policy for oil explorers operating difficult fields?

    DEEPAK MAHURKAR

    Yes indeed! The royalty rates are (expected to be) different. If India introduces free market pricing for gas, differential prices owing to source being difficult fields seems difficult to administer.


  • J

    JAGAN

    what should the govt do to reduce India's import dependence?

    DEEPAK MAHURKAR

    While demand side management and alternattive renewable fuels are the way, the gap being so high, India will also need to produce much more domestically. Introducing guidelines to deal with ambiguities in contracts, ease of doing business, contract enforcement, generating more exploration data, freedom to bring in investors, easing exits, and finally incentivizing production will attract investments needed for domestic production boost.


  • J

    JAGAN

    Can the govt afford a cut in the cess rate to provide relief to oil producers?

    DEEPAK MAHURKAR

    The government would look to wider impact on the sector and accommodate demands which are secular.


  • S

    SURHIT

    Will Jaitley remove import duty on LNG and excise duty on CNG?

    DEEPAK MAHURKAR

    Removal of these duties is not in line with the long term tax structure in India. If India eventually plans to have petroleum products and gas in classical GST structure, they would not be considered for review.


  • S

    SHIVA

    Do you see the Budget announcing some mandatory schemes like Pahal for gas subsidy?

    DEEPAK MAHURKAR

    We expect the GoI to make citizens climb the energy ladder and make better fuels available. The distribution and logistics around that remains a challenge. However, the GoI is also keen to assess what is coming in the way of reaching the fuels home. Hence, we expect innovative schemes to be introduced for hilly areas, remote places and small consumers.


  • S

    SHEKHAR SHARMA

    Do you think the Pradhan Mantri Ujjwal Yojana was successful? If yes, what more can we expect in this regard from Budget 2017-18?

    DEEPAK MAHURKAR

    PMUY was a good way to approach the problem. The penetration was to be targeted. Many consumers had not expected to use LPG in their lifetime for perceived affordability reasons, but they got to!