India's bid to raise natural gas share in energy basket faces hurdle

Varying taxation rate with no input credit pass-through coming in the way

A pitch for change in the taxation regime for natural gas by British Petroleum’s (BP’s) Bernard Looney comes at a time when the country has not been able to transition into a gas-based economy despite prevalence of low global prices.

India has set a target of raising the share of natural gas in the ene­rgy basket to 15 per cent by 2030 from the current 6.72 per cent. However, a high and varying taxation rate with no input credit pass through are coming in the way. 

While the reason for pushing for natural gas is environmental because coal-based power creates more pollution,