Oil cess may be halved to give impetus to ‘Make in India’
The government may give a ‘Make in India’ push to oil and gas explorers, as it is considering a proposal to almost halve cess on domestic crude oil to encourage exploration activity and allow COVID-hit oil producers to protect their margins.
migrator
New Delhi
The glut in the oil market and deep suppression of demand during the peak of pandemic in 2020 had pushed down crude oil prices to unprecedented levels. Though crude prices have recovered over the vaccination drive against COVID-19 and a pick in demand coupled with unilateral production cut announced by Saudi Arabia, cess puts domestic crude at a disadvantage against imported oil.
Cess on domestic crude is currently levied at the rate of 20 pc of the value of oil. Sources said the proposal by the Union Oil Ministry is to reduce it to 10 pc. If this is accepted by the Finance Ministry, the changes may be announced as part of Budget 2021-22 proposals, sources said.
Though the larger view is in favour of halving the cess, the exact quantum would be worked out later.
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