Union Budget 2016-17: Impact on What Oil & Gas sector

A proposal is under consideration for new discoveries and areas which are yet to commence production, first, to provide calibrated marketing freedom; and second, to do so at a pre-determined ceiling price to be discovered on the principle of landed price of alternative fuels

Mar 01, 2016 10:03 IST India Infoline News Service


Oil & Gas – Negative
Key announcement Impact
Rate of Oil Industries Development Cess,
on domestically produced crude oil changed from
Rs4,500/ton to 20% ad valorem
Lower than expected benefit, negative
for ONGC, Oil India and Cairn India
 No deduction shall be available to an undertaking engaged in
production of mineral oil or natural gas if the production
commences on or after 1st April, 2017
 Negative for ONGC, Oil India,
Reliance Industries, Cairn India
A proposal is under consideration for new discoveries and
areas which are yet to commence production, first, to provide
calibrated marketing freedom; and second, to do so at a
pre-determined ceiling price to be discovered on the principle
of landed price of alternative fuels
 No impact till the regulations are finalized
Against expecations the government did not levy any customs duty on crude oil  Negative for ONGC but positive for HPCL,
BPCL and IOC
Goods required for exploration & production of hydrocarbon activities undertaken under Petroleum Exploration Licenses (PEL) or Mining Leases (ML) issued or renewed before 1st April 1999  Positive for ONGC, Oil India

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