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Journalism of Courage
On the eve of Budget 2005, we walk the pre-budget talk with a look at what’s buzzing in key sectors.
First up: oil and gas
• Duty revamp: Customs on crude may go down to 5% from 10%. Cut expected in excise for LPG and kerosene.
• Subsidy rationalisation: LPG, kerosene subsidy to be targeted at the needy by limiting subsidies to lower per-capita households.
WHAT I DON’T EXPECT IN BUDGET 2005
‘‘Indications on stable pricing mechanism or changes in the price structure of products (LPG, kerosene, diesel, petrol).’’
—M.B. LAL, CMD, HPCL
‘‘Extending VAT to petroleum products and infrastructure status to the sector.’’
— Sanjay Kaul, Director, Indian School of Petroleum
‘‘I’m not sure Budget 2005 will shift from ad-valorem to specific duties on petroleum products.’’
— S. Behuria, CMD, BPCL
BUDGET 2004 RECAP
• Pledge of equity support and loans to oil sector PSUs.
• Non-Budget duty revamp in 2004-end when international crude oil prices shot up.
PERFORMANCE SNAPSHOT
• Thanks to high international crude oil prices, marketing companies did not perform well during the year with IBP registering losses and profits of IOC, HPCL and BPCL eroding due to underrecoveries. But firms in crude oil production, ie ONGC, did well.
