Tax Code For Oil Hunt Being Framed

The government has appointed Price Waterhouse as the consultant for drawing up a new tax code for the New Exploration Licensing Policy (NELP) announced by finance minister P Chidambaram in his Budget speech.

The new tax code will apply to the exploration blocks identified by the petroleum and natural gas ministry to be offered under NELP. The bidding process for these blocks is expected to begin by late August or early September.

Petroleum secretary Vijay Kelkar told a press briefing yesterday that Price Waterhouse made a presentation last week. The presentation was also attended by top officials of the revenue department. Kelkar was hopeful that the new tax code would be ready in about a months time to enable the ministry to finalise terms for the new blocks to be offered under NELP after which the ministry could initiate the bidding process.

Petroleum minister Janeshwar Mishra, who called the briefing, refused to comment on the impending oil price hike as well as the recommendations of the Arjun Sengupta Committee.

It is under consideration of the petroleum and finance ministries besides the Planning Commission. I will not like to comment on it now until a final decision is arrived at. We are considering these recommendations along with the suggestions from the Left parties, and a decision will be arrived at after a consensus emerges, the minister stated, adding that efforts were on to check the burgeoning oil pool deficit.

Under NELP, the upstream public sector companies the Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) are to be provided a level playing field by giving them the same fiscal and contract terms that are available to private companies.