X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2019 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Budget wish list: Oil & Gas - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Budget wish list: Oil & Gas

Jun 22, 2009

It would be an understatement to say that the fortune of the Indian oil and gas sector is extremely sensitive to government policies. With the date of the Union Budget 2010 fast approaching, the industry is eagerly anticipating measures which will encourage profitable activity. Let us look at some of the key expectations: Upstream segment

  1. Income tax holiday on the production of natural gas in line with crude oil.
  2. Flexibility in availing the tax holiday on the production of crude oil in a block of 10 to 15 years.
  3. Removal of minimum alternate tax (MAT) on exploration & production companies.
  4. Accelerated rate of depreciation on equipment used for exploration.
  5. Removal of service tax on exploration activity.

Downstream segment

  1. Deregulation of fuel prices.
  2. Income tax holiday for city gas distribution.

Of all the points in the wish list, the most important is the income tax holiday on the production of natural gas. As of now, the tax break is provided only on the production of crude oil because section 80IB (9) of the Income Tax Act, 1961, reads:

"The amount of deduction to an undertaking which begins commercial production or refining of mineral oil shall be hundred per cent of the profits for a period of seven consecutive assessment years including the initial assessment year."

This has caused a lot of heartburn to the natural gas sector in India, the prospects of which have looked bright ever since RIL's KG basin gas discovery. It is impossible for explorers to determine in advance whether their effort will lead to the discovery of oil or gas. If they hit upon oil, they get the tax incentive, if they hit upon gas, they don't. As a result, the 7th round of auctions of oil & gas blocks under the New Exploration Licensing Policy received a poor response and the 8th round this year has been postponed to August.

In fact, the Petroleum Minister has met the Finance Minister to present his case for this sop, and so far it seems that Mr. Mukherjee will address the issue.


Equitymaster requests your view! Post a comment on "Budget wish list: Oil & Gas". Click here!

  

More Views on News

BPCL Plunges by 5%; BSE OIL & GAS Index Down 2.5% (Market Updates)

Apr 22, 2019 | Updated on Apr 22, 2019

BPCL share price has plunged by 5% and its current market price is Rs 355. The BSE OIL & GAS is down by 2.5%. The top gainers in the BSE OIL & GAS Index [TOPCOMPANY]. The top losers are BPCL (down 5.1%) and HPCL (down 6.4%).

The BSE OIL & GAS Index Down 2% ; HPCL Among Top Losers (Market Updates)

Apr 22, 2019 | Updated on Apr 22, 2019

The BSE OIL & GAS Index Down at 14,876 (down 2.0%). Among the top losers in the BSE OIL & GAS Index today are HPCL, BPCL and IOC. Meanwhile, the BSE Sensex has plunged 0.7% to 39,158.

The BSE OIL & GAS Index Down 2% ; HPCL Among Top Losers (Market Updates)

Apr 22, 2019 | Updated on Apr 22, 2019

The BSE OIL & GAS Index Down at 14,876 (down 2.2%). Among the top losers in the BSE OIL & GAS Index today are HPCL, IOC and BPCL. Meanwhile, the BSE Sensex has plunged 0.5% to 39,158.

HPCL Plunges by 5%; BSE OIL & GAS Index Down 2.2% (Market Updates)

Apr 22, 2019 | Updated on Apr 22, 2019

HPCL share price has plunged by 5% and its current market price is Rs 260. The BSE OIL & GAS is down by 2.2%. The top gainers in the BSE OIL & GAS Index [TOPCOMPANY]. The top losers is HPCL (down 5.3%)..

ONGC: Higher Volumes and Oil Prices Support Performance (Quarterly Results Update - Detailed)

Nov 3, 2017

HPCL Deal Remains the Known 'Unknown'.

More Views on News

Most Popular

Stocks that Could Be Out of Reach Post Elections(The 5 Minute Wrapup)

Apr 9, 2019

It's a matter of time before the stocks catch the fancy of the markets and big investors.

3 Indian Stocks with Amazon-Like Potential(Profit Hunter)

Apr 10, 2019

We have identified 3 stocks with huge wealth building potential which meet our 'Click of a Button' criteria.

This Company is Making a Big Comeback and You Can Now Profit from Its Example(The 5 Minute Wrapup)

Apr 10, 2019

How Dell got its mojo back.

This is Why the Stock of Jubilant FoodWorks Went Up 1,160%(The 5 Minute Wrapup)

Apr 12, 2019

This critical business strategy has enabled companies to scale their operations faster.

Pocketing Massive Gains with HDFC And HDFC Bank(Profit Hunter)

Apr 12, 2019

Here's how one could have generated gains of Rs 59,250 in 10 days by trading HDFC and HDFC Bank with a capital of Rs 4 lakh.

More

Get the Indian Stock Market's
Most Profitable Ideas

How To Beat Sensex Guide 2019
Get our special report, How to Beat Sensex Nearly 3X Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE OIL & GAS


Apr 22, 2019 (Close)

S&P BSE OIL & GAS 5-YR ANALYSIS

COMPARE COMPANY

MARKET STATS