With #FinanceMinister #Sitharaman set to present Budget 2025-26 on February 1, the oil and gas industry awaits announcements related to inclusion of petroleum products in the goods and services tax #GST net, compensation for losses incurred by state-run oil marketing companies #OMCs on subsidised liquified petroleum gas #LPG and announcements around green energy transition.

Top of the industry wish list is bringing petroleum products under the GST regime.

The Confederation of Indian Industry (CII) said in its budget memorandum that the government should launch GST 2.0, incorporating petroleum products such as petrol, aviation turbine fuel or jet fuel and natural gas under it.

These products have not been included under GST mainly due to opposition from state governments on the grounds that such a move would hit their revenues. To be sure, any decision on GST is taken by the GST Council, a joint forum of the Centre and the states. But a recommendation in the budget by the finance minister, who heads the council, can be a big positive.

Meanwhile, state-owned OMCs including Indian Oil Corporation Limited #iocl Bharat Petroleum Corporation Limited #BPCL and Hindustan Petroleum Corporation Limited #HPCL are hopeful of compensation for the losses incurred by the companies on the sale of LPG cylinders below cost, according to media reports.

IOCL booked under-recovery of Rs 8,870.11 crore for the first six months of FY25 on the sale of cooking gas cylinders as the retail selling price was less than market-determined price. BPCL and HPCL too have reported under-recovery on sales of LPG cylinders. This is against the backdrop of high global prices of the fuel as the country is dependent on LPG imports for the majority of domestic consumption.

In the upstream sector, industry expects approval of the Oilfield (Regulation and Development) Amendment Bill. Aimed at boosting investments in the oil and gas exploration sector, the bill is expected to provide policy stability and promote ease of doing business in the sector.

The bill proposes to introduce ‘petroleum lease’ to separate oil and gas exploration projects from mining in a bid to resolve complexities around land and environmental clearances, which has often resulted in project delays, while also expanding the definition of mineral oils, among other changes.

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