On Wednesday, 1 February 2023, the Hon'ble Finance Minister, Nirmala Sitharaman, presented Union Budget 2023 in the Lok Sabha.
We bring you the key amendments proposed in Finance Bill 2023 in respect of oil and gas sector.
India witnessed an increase in import of petroleum crude & products by 45.6% in value, from US$112.6 billion in April-December 2021 to US$163.9 billion in April-December 2022 and continues to be the highest imported commodity. The increase in oil prices was mainly on account of unprecedented cuts in crude oil supply by the OPEC and supply disruptions amid rising tensions in eastern Europe. With this backdrop, the Government in this Budget has laid down a vision to spur a movement of environmentally conscious lifestyle. Its aim is to move towards an ambitious target of net-zero carbon emission by 2070 to usher in a green industrial and economic transition.
Some key highlights of the Union Budget 2023 are as under:
- In addition to Green Hydrogen Mission, the Budget provides INR35,000 crore allocation towards energy transition, net-zero objectives and energy security by Ministry of Petroleum & Natural Gas
- 500 new waste-to-wealth (biogas) plants at an investment of INR10,000 crore to be established. Additionally, 5% CBG mandate to be introduced for all organizations marketing natural and biogas
- The government will return 95% of the forfeited amount relating to bid or performance security to MSMEs where there was failure to execute contracts during the covid period. This will provide relief to MSMEs operating in oil and gas sector
- MSMEs can further take benefit of the revamped credit guarantee scheme which will enable additional collateral-free guarantee of INR2 lakh crore and cost of credit will be reduced by about 1%
- A Green Credit Programme will be notified which will incentivize environmentally sustainable and responsive actions
- Custom duty is exempted on denatured ethyl alcohol which will facilitate Ethanol Blending Programme
