NEW DELHI: The oil and gas industry is hopeful that the budget may treat natural gas on a par with crude oil for tax exemption, which could revive investors' interest in future auction of oil blocks, but it does not see any strong commitment from the government on this matter.

"We can only hope, but the finance ministry is adamant that the matter, which is sub judice in various IT appellate tribunals, cannot be resolved through the Finance Bill," a senior executive in an upstream firm said requesting anonymity.

Oil minister M Veerappa Moily on Monday ruled out a rollback in the Rs.1.50-a-litre hike in petrol and 45 paise a litre increase in diesel rates, saying only a small raise has been passed on to consumers.

“I think everybody would appreciate that we have not put a lot of burden on consumers. It is only small doses,” Moily told reporters. “Our country imports 73-75% of oil. We need to pay R7 lakh crore for the imports. Where do we find that kind of money?” he said.

ONGC, BPCL soon to sign an MoU for putting up LNG terminal at Mangalore

ONGC, Six years after the $1 billion project was put in cold storage, state-owned Oil & Natural Gas Corp (ONGC) will by this month-end revive plans to set up a liquid gas (LNG) import terminal near its Mangalore refinery in Karnataka. “In next 10 to 15 days, ONGC and Bharat Petroleum Corp Ltd (BPCL) will sign an MoU for putting up a LNG terminal at Mangalore,” Oil Minister M Veerappa Moily announced at the inauguration of state gas utility GAIL India Ltd’s Dabhol-Bangalore gas pipeline.

The 1,000-km pipeline will feed industries at Belgaum, Dharwad, Gadag, Bellary, Davanagere, Chitradurga, Tumkuyr, Ramanagaram & Bengaluru

State-owned gas utility GAIL India Ltd today commissioned a Rs 4,500 crore pipeline carrying gas from the just operationalised Dabhol LNG terminal into Bengaluru that promises to change the energy landscape of the region. The 1,000-km pipeline will feed industries at Belgaum, Dharwad, Gadag, Bellary, Davanagere, Chitradurga, Tumkuyr, Ramanagaram and Bengaluru which have till now been using costlier and polluting liquid fuels like naphtha and diesel as feedstock.

State-owned gas firm GAIL (India) Ltd and US arm of France’s EDF group have placed a joint bid to acquire some of Spanish energy company Repsol SA’s LNG assets in Trinidad and Tobago.

‘‘We have placed a non-binding bid,’’ GAIL Chairman and Managing Director BC Tripathi told reporters here. Repsol has put on sale its gas assets in Canada, Peru and Trinidad & Tobago. Refusing to divulge details, Tripathi said the bids, which were submitted recently, were initial and non-binding in nature and GAIL-EDF combine will make a financial bid only once they are shortlisted.

U.S.

Despite the ECC body on Tuesday reached consensus that acceptance of two controversial bids would be violation of PPRA rules, petroleum ministry was going to press Cabinet’s Economic Coordination C

Base price of domestic natural gas comes to around $7.4 per mBtu

Analysts may be seeing a positive for Reliance Industries Ltd (RIL) in the Rangarajan panel’s recommendations on gas pricing, but the committee’s formula would work out the natural gas price at less than what RIL has been seeking for its KG-D6 block produce. Based on the panel’s formula, the base price of domestic natural gas comes to around $7.4 per million British thermal unit (mBtu), but the pricing formula proposed by RIL, officials say, translates the price into $13-14 an mBtu.

A new fiscal regime for oil and gas output is broadly welcome with attendant institutional revamp

There seems much policy reform in the pipeline in the oil and gas sector. The report of the ‘Committee on the production sharing contracts mechanism in petroleum industry’ calls for policy overhaul to incentivise exploration and production (E&P) of hydrocarbons. The panel, headed by Dr C Rangarajan, has recommended a revamped policy regime for new contracts in the upstream oil and gas industry based on upfront revenue share for government, rather than cost recovery for licensee operators being the primary focus as at present.