Bring natural gas, aviation turbine fuel in GST ambit: Dharmendra Pradhan

FM Sitharaman assures sanctity of contracts

Union Petroleum Minister Dharmendra Pradhan on Monday asked for inclusion of natural gas and aviation turbine fuel (ATF) in the goods and services tax (GST). 

Key petroleum products, including petrol, diesel, crude oil, natural gas and ATF, were kept out of the GST regime due to the revenue dependence of state governments in this sector. Addressing India Energy Forum by CERA Week in Delhi, Pradhan said, “I make a strong appeal to finance minister to take this up in the GST Council and at least make a beginning by including natural gas and ATF in GST.”

India is expected to garner an estimated investment of $58 billion in exploration and production sector by 2023. Regarding the concerns related to the exploration sector, Finance Minister Nirmala Sitharaman said the country would honour contracts with producers. 

Under the NDA government, India has completed three bid rounds under Open Acreage Licensing Policy and two rounds of bidding under the Discovered Small Fields (DSF) policy. 

The government has been batting to increase the share of natural gas by 2022. Pradhan said an estimated investment of $60 billion was lined up in building gas pipelines, terminals, and city gas infrastructure that are in different stages of implementation. According to the International Energy Agency, India’s energy sector had recorded the second highest growth in investment during 2015 to 2018. 

CGD networks are expected to cover half of India’s geography and serving 70 per cent of the population through availability of low carbon and affordable natural gas. 

Amar Nath, the joint secretary in charge of exploration at the Ministry of Petroleum and Natural Gas said to boost domestic natural gas production, India is looking for more investment from the private sector. The government had asked state-run Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) to invite for private partnership to boost production in 66 blocks. 

“The bids for these 66 blocks are set to be closed by the end of December. At present, 95 per cent of production by national oil companies is coming from 60-odd blocks. This is going to change soon,” Nath added. 

During the two rounds of discovered small field auctions, 53 blocks were awarded to various producers. These are expected to have 233.6 million tonne of oil equivalent. On the other hand, 87 contracts were signed during three rounds of Open Acreage Licensing Policy auctions covering over 118,000 sq km. 

Pradhan added that growing presence of global oil and gas majors like Saudi Aramco, ADNOC, BP, Shell, Total, Rosneft, and ExxonMobil in India is a testimony to the faith of global investors in India. 

India is ushering into BS-VI complaint fuel from April 2020. The minister said the country would be giving thrust on biofuels as an effort giving push to clean energy too. “The new national biofuel policy envisages an integrated approach to produce biofuels from various types of agriculture residue and municipal solid waste,” he added.