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It’s more than oil
Finally tax holiday is extended
Perhaps for the first time our Petroleum Ministry has reacted positively to increase reserves of oil and gas for the economy. The ministry has aimed to double its proposed strategic crude oil reserves to 10 million tonnes. For this, the ministry has rightly sought a 10 year tax holiday on new explorations and production facilities from the Finance Ministry and invited public and private players to participate in the seventh auction. Well, the Petroleum Ministry got huge relief after the Finance Minister has extended the deadline of seven years tax holiday to March 31, 2012 on oil and gas refinery and production in the Finance Bill 2008-09. Petroleum Ministry was under deep confusion as it had to postpone the seventh auction of oil and gas under New Exploration and Licensing Policy (NELP) thrice as Finance Ministry was not in favour of extending the tax holiday. However, the auction is finally finalised on 16th May which will help companies like IOC, BPCL, HPCL.
The tax exemption is imperative to encourage domestic exploration as India is witnessing development, demand of energy is rising and it has very few reliable external sources to import. Thus, inviting private players capable of deepwater exploration will surely boost efficiency. Few of Indian players like RIL, ONGC are incapable for deepwater exploration thus they have to tie up with foreign players. The country is in a position to complete 5 million tonnes of reserve while it encourages private players to attain another 5 million tonnes. Finally Finance Ministry has listened to them.
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