Budget 2017: Lauding the Narendra Modi government for making the move to decontrol the price of petrol and diesel, Nabin Ballodia, Partner, Tax, KPMG in India says Finance Minister Arun Jaitley must deregulate Kerosene even as he expects a decline in taxes on petrol and diesel. “I would like to compliment the government on the pricing issue. They have done pretty well in decontrolling the pricing of petrol and diesel and actually bringing in sanity and reality to the segment. After the petrol and diesel, price of kerosene needs to be deregulated. Although it will impact the social sector, rural sector. But at the end of the day we have to come closer to the reality. It can be done in a phased manner but it is very important,” he told FE Online.
Noting that kerosene prices are getting revised, Nabin says the bigger concern is the leakage of the subsidy. “I am expecting that taxes on petrol and diesel will actually come down so that we see lower prices for the petroleum,” he says.
Watch this video
Terming oil and gas sector as a crucial one, Nabin says the government must focus on the domestic production as well as overseas acquisition of oil blocks for the purpose of energy security of the country and reducing its import bill for crude oil. The government needs to give away tax incentives to natural crude oil producers to make it viable for them as it can bring a lot of interests, he says.
He feels the government can consider the minimum alternate tax for the oil producers which has been a matter of concern for sometimes. He also opines that the government can play crucial role in overseas acquisition just like China do.
You may also like to watch
Regarding the gas pricing and distribution, he says, there has considerable progress been made in LPG and we are moving in the right direction. “The government should start looking at city gas distribution network because once it is done, logistics issue will be taken care of. To make it happen some degree of incentives like it is given in case of cross-country gas pipeline,” he says.
Ahead of the Union Budget, state-owned oil producer ONGC and private sector Cairn India had asked the government to cut cess on crude oil saying the switch over from fixed to ad valorem rates had turned things from bad to worse. The producers want the government to cut the cess to 8 per cent of the price they realise on sale of domestically produced crude oil. In the previous Budget, Finance Minister Arun Jaitley had converted Rs 4,500 per tonne fixed cess on crude oil to 20 per cent ad valorem.
You may also like to watch
A huge investment of USD 25 billion in the oil and gas sector is on the anvil, Union Petroleum and Natural Gas Minister Dharmendra Pradhan had earlier said. Replying to a question on volatile oil prices globally he had said that companies reposition themselves in accordance with fluctuating crude oil prices in the international market.
Pradhan had claimed that the Centre’s oil policy has strengthened the economy. “The government has also pumped in 50 per cent of the profits earned from the oil sector into unique schemes like the Prime Minister’s Ujjwala Yojana for the welfare and empowerment of women. Since the launch of the scheme in May this year more than 90 lakh LPG connections have been distributed among beneficiaries of the scheme all over the country and to over 50,000 women in Uttarakhand alone which is quite an achievement,” he had said.