FM may restore holiday for oil, gas E&P

Finance Minister P Chidambaram may restore seven-year tax holiday for oil and gas exploration and production, but the same facility may not be given to refineries commencing after April 1, 2009.

Chidambaram had in his budget proposal for 2008-09 stripped the tax holiday for oil and gas production, a move that had threatened to derail the country's latest E&P licensing round.

Sources said Petroleum Minister Murli Deora yesterday met Chidambaram explaining to him that the tax holiday was a sovereign commitment of the government to companies that had invested under the New Exploration Licensing Policy.

Chidambaram is believed to have agreed to delete the proposal from the Finance Bill that is pending before Parliament.