EXPECTATIONS -
1. Implementation of the new gas pricing formulated by C.Rangarajan Commiitee recommendations.
2. Exemption of import duty on LNG, currently it is at 5%( exempted only for Power).
3. Re-introduction of custom duty @ 5% on crude oil.
4. LNG & Natural Gas may grant the Declared Good status .
5. Granting of Tax holiday to natural gas sector (7 year tax holiday are applicable to crude oil E&P activities).
6. Extension of tax holiday to refinery projects till the end of 12th five year plan (i.e. 2012-2017).
IMPACT -
1. Positive for the upstream companies like RIL,ONGC,Oil India.
2. Positive impact as the lower domestic output of natural gas along with increasing demand raises the importance of LNG. Key beneficiaries: PetronetLNG,.GAIL & IGL.
3. This move will facilitate the GoI to address the CAD and fiscal deficit. Negative for oil & gas companies due to higher under-recoveries.
4. Encourage the domestic natural gas sector to carry out more production raising activities. Positive for ONGC,RIL.
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