At a late night meeting held on Thursday at petroleum minister Dharmendra Pradhan’s residence, ONGC chairman Shashi Shanker conveyed that the national explorer was ‘already in the red’ after buying out Hindustan Petroleum Corp and bailing out Gujarat State Petroleum in fiscal 2017-18, the report said.
He also said that government needs to work out a long-term well worked out strategy to reduce country’s dependence on oil and oil imports. It implies that use of biofuels should be encouraged in the long-term but in the short-term, domestic production should be encouraged, he further told India Today TV.
The Centre is currently working out a solution with ONGC wherein the upstream oil major could be directed to sell its crude oil at below ruling international prices by capping the price for the entire fiscal year. ONGC supplies an estimated 20% of the country’s total crude oil requirement to refining and marketing companies IOC, HPCL and BPCL.
Speaking to The Indian Express, Rajiv Kumar, vice chairman, Niti Aayog, said: “The states must cut their taxes because they have got ad valorem (percentage-based) taxes. As the prices have gone up, they have been getting a windfall gain, which can hardly be continued. So they must reduce it below 27%… a 3-4 percentage point cut is doable. The central government must find the fiscal space and then cut the excise duties.”
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