NEW DELHI, March 20 – Even as the four refineries in the North-east face financial meltdown, the demand for 100 percent Excise Duty concession from the current level of 50 per cent has few takers in the Union Finance Ministry.
Faced with resources crunch, the Ministry of Petroleum and Natural Gas took up the long-pending demand for concessions with the Department of Revenue of Ministry of Finance.
The Ministry has been informed the issue of 100 per cent concession to refineries of the North-east was examined in the past and it was not found advisable to support an unviable unit through fiscal instrument whose impact is always not transparent.
Further, it was felt that extending the North-east exemption to existing petroleum refineries would generate similar demands from other sectors.
“Therefore, it has been decided by the Ministry to extend a uniform concessional rate of 50 per cent of the effective rate of Excise Duty (basic, special, AED and special additional duty of excise) to all the four refineries in the North-east including Numaligarh Refinery Limited (NRL), Indian Oil Corporation, Digboi and Guwahati and Bongaigaon Refinery and Petrochemical Limited (BRPL),” Parliamentary Standing Committee on Petroleum and Natural Gas said in its latest report submitted to the Parliament.
But the panel remarked that it noted with concern that no action has been taken by the Government on their earlier recommendation for excise duty concession from the current level of 50 per cent to 100 per cent. “The previous recommendation should be implemented and excise concession should be increased,” the committee recommended.
Meanwhile, deteriorating financial health of oil refineries in the North-east has led the Parliamentary panel to urge the Central Government to take corrective measures.
The Parliamentary Standing Committee has expressed its unhappiness and noted with concern the financial health of oil refineries in the Northeastern region due to high landed cost of imported crude oil and the entry tax on crude oil being charged by the State Governments, which is affecting the profitability of the refineries.
In its latest report submitted in the Parliament, the Standing Committee has urged the Ministry to scrupulously implement the recommendations of the expert committee in all the refineries of the region to make them economically viable and profit earning.
The Ministry of Petroleum and Natural Gas told the committee that as part of the remedial measures, the Government had formed a committee to study ‘optimisation of capacity utilisation of the refineries in North-east’.
The committee had submitted its report to the Ministry of Petroleum and Natural Gas and action has been taken to augment crude oil production in the region by offering acreages under the New Exploration Licensing Policy (NELP) and also enhance oil recovery through Enhanced Oil Recovery (EOR) methods, the report said.
Meanwhile, both the public sector oil giants, Oil and Natural Gas Corporation Limited (ONGC) and Oil India Limited (OIL) have failed to meet targets due to non-availability of drilling rigs both in on-land and off-land areas. As against the target of 274 on-land wells to be explored by ONGC during the first three years of 11th Plan, only 201 wells could be explored.
Similarly, OIL has drilled only 33 wells during the same period. Non-availability of drilling rigs had also adversely affected Oil’s drilling programme, as out of 10 in-house drilling rigs, refurbishment of eight drilling rigs is reported to be in progress, the report said.
The Ministry of Petroleum and Natural Gas has reported back to the Parliamentary panel that non-availability of drilling rigs has severely affected OIL’s drilling programme.
OIL, at present, has 10 in-house rigs in operation in Assam, which are vintages varying from 20-30 years. In addition, one in-house drilling rig is deployed in Rajasthan. Due to its age, the performance of the rigs in Assam has deteriorated to a large extent, leading to frequent failures and operation downtime.
assamtribune
Faced with resources crunch, the Ministry of Petroleum and Natural Gas took up the long-pending demand for concessions with the Department of Revenue of Ministry of Finance.
The Ministry has been informed the issue of 100 per cent concession to refineries of the North-east was examined in the past and it was not found advisable to support an unviable unit through fiscal instrument whose impact is always not transparent.
Further, it was felt that extending the North-east exemption to existing petroleum refineries would generate similar demands from other sectors.
“Therefore, it has been decided by the Ministry to extend a uniform concessional rate of 50 per cent of the effective rate of Excise Duty (basic, special, AED and special additional duty of excise) to all the four refineries in the North-east including Numaligarh Refinery Limited (NRL), Indian Oil Corporation, Digboi and Guwahati and Bongaigaon Refinery and Petrochemical Limited (BRPL),” Parliamentary Standing Committee on Petroleum and Natural Gas said in its latest report submitted to the Parliament.
But the panel remarked that it noted with concern that no action has been taken by the Government on their earlier recommendation for excise duty concession from the current level of 50 per cent to 100 per cent. “The previous recommendation should be implemented and excise concession should be increased,” the committee recommended.
Meanwhile, deteriorating financial health of oil refineries in the North-east has led the Parliamentary panel to urge the Central Government to take corrective measures.
The Parliamentary Standing Committee has expressed its unhappiness and noted with concern the financial health of oil refineries in the Northeastern region due to high landed cost of imported crude oil and the entry tax on crude oil being charged by the State Governments, which is affecting the profitability of the refineries.
In its latest report submitted in the Parliament, the Standing Committee has urged the Ministry to scrupulously implement the recommendations of the expert committee in all the refineries of the region to make them economically viable and profit earning.
The Ministry of Petroleum and Natural Gas told the committee that as part of the remedial measures, the Government had formed a committee to study ‘optimisation of capacity utilisation of the refineries in North-east’.
The committee had submitted its report to the Ministry of Petroleum and Natural Gas and action has been taken to augment crude oil production in the region by offering acreages under the New Exploration Licensing Policy (NELP) and also enhance oil recovery through Enhanced Oil Recovery (EOR) methods, the report said.
Meanwhile, both the public sector oil giants, Oil and Natural Gas Corporation Limited (ONGC) and Oil India Limited (OIL) have failed to meet targets due to non-availability of drilling rigs both in on-land and off-land areas. As against the target of 274 on-land wells to be explored by ONGC during the first three years of 11th Plan, only 201 wells could be explored.
Similarly, OIL has drilled only 33 wells during the same period. Non-availability of drilling rigs had also adversely affected Oil’s drilling programme, as out of 10 in-house drilling rigs, refurbishment of eight drilling rigs is reported to be in progress, the report said.
The Ministry of Petroleum and Natural Gas has reported back to the Parliamentary panel that non-availability of drilling rigs has severely affected OIL’s drilling programme.
OIL, at present, has 10 in-house rigs in operation in Assam, which are vintages varying from 20-30 years. In addition, one in-house drilling rig is deployed in Rajasthan. Due to its age, the performance of the rigs in Assam has deteriorated to a large extent, leading to frequent failures and operation downtime.
assamtribune
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