Budget 2026: Will petrol and diesel come under the purview of GST this time?
With the sound of Budget 2026, the hustle and bustle in the corridors has intensified. According to exclusive information received by ET Now Swadesh quoting sources, the Petroleum Ministry has sent a very important proposal to the Finance Ministry for the upcoming budget. The main objective of this proposal is to make Indian oil and gas companies globally competitive and to promote investment in the country.
The Petroleum Ministry has requested the Finance Ministry to make a major cut in the tax imposed on ‘Exploration and Production’ (E&P) companies. At present the tax on domestic oil and gas production is considered to be quite high. The ministry proposes that this tax should be reduced to the range of 35% to 40%. The logic behind this demand is that only when the tax rates in India will be at par with global standards, foreign and domestic investors will be attracted to make large investments in this sector.
Special focus on Pre-NELP blocks
Read full article
An important fact is that about 90% of India’s total domestic oil and gas production comes from blocks that belong to the ‘Pre-NELP’ era. The effective tax rate on these old blocks is quite high. The ministry believes that if the tax on these is reduced, the cost of production will reduce and companies will be able to invest more in digging new wells and technology.
Preparation to complete ‘Mission 2030’
The government has set an ambitious target of increasing domestic gas production and becoming self-reliant for its energy needs by 2030. Sources say that the Petroleum Ministry has made it clear that if this goal is to be achieved, a stable and favorable taxation policy is essential. Without tax relief it will be difficult to increase the pace of production.
Once again the Ministry has advocated bringing petroleum products (especially natural gas and ATF i.e. aviation fuel) under the ambit of GST. With this, companies will get the benefit of input tax credit, which will reduce the overall cost. However, the final decision on this has to be taken by the GST Council and in the past also many states have opposed it fearing loss of their revenue. The ministry wants that this time the Finance Ministry should find a middle path in collaboration with the states.
The Petroleum Ministry believes that investment in the oil and gas sector is for years. In such a situation, frequently changing tax rules scare investors. Therefore, a policy is expected in Budget 2026 that can provide relief and clarity to companies on the tax front for at least the next decade.
If these recommendations are accepted in the budget, then big companies like ONGC, Reliance Industries and Oil India may see a big improvement in the margins.
-
budget
Budget Expectations 2026: Farmers can get a big gift, will there be a big announcement to increase aqua culture and agricultural production?
-
markets
HDFC AMC Share Price: After strong quarterly results, investors bought heavily, strong rise in shares.
-
markets
Angel One Share: Investors won the lottery at a bumper pace! Double gift of dividend and stock split – see record date
-
markets
Infosys Share Price Target: Tremendous rise in IT stocks after the results, brokerages increased targets. Buy, Sell or Hold?
-
personal-finance
Gold and silver prices today, 16 January 2026: After 3 days of rise, silver and gold rates fell, see new prices from Punjab to Bihar.
-
news
SSC MTS Slot Booking: Self-slot booking started, opportunity to choose exam center and shift of your choice, know the complete method
-
news
Today’s weather, January 16: Delhi shivers with bone-chilling cold! Rain alert in 6 states of North India, know the condition of UP and Bihar
-
news
Flight Update Today: Dense fog may spoil your flight schedule, see advisory before going to the airport
end of article
