The county’s oil and gas sector seeks supportive regulatory reforms in order to stabilise gas prices by bringing it under the Goods and Services Tax (GST), and steps to increase investment opportunities in the exploration of oil in the upcoming Union Budget.

“Incorporating GST into gas pricing is crucial at this juncture. Stabilizing gas prices across the nation, which have been inconsistent and created significant disparities within the industry, is equally important,” said Kapil Garg, Chairman & Managing Director, Oilmax Energy.

The industry expects the government to make use of natural gas mandatory for areas where the infrastructure is ready and gas is flowing to help the country achieve the target of increasing gas share in the energy mix to 15% from the current 6% by 2030. The industry’s expectations come in sync with the government’s goal.

Oil minister Hardeep Singh Puri has said that the focus of the new alliance government would be on boosting oil and gas exploration and production, green hydrogen, and increasing the consumption of gas in the country to achieve a gas-based economy.

“With a potential decline in oil production by 2030, increasing investment in oil exploration is essential. This will not only build confidence among domestic players to venture beyond shallow waters and into deep-sea exploration but also ensure sustained growth in capacity,” Garg said. “Continued capital expenditure (CAPEX) investment is necessary, particularly in energy, logistics, and infrastructure, including gas pipelines and railway corridors.”

The minister has also said that this time the government will work to bring gas under GST. The industry players are confident of some development in this regard. “We look forward to the government’s commitment by considering the inclusion of natural gas under the GST ambit,” Hardip Singh Rai, Chief Executing Officer of THINK Gas had earlier said.

EverEnviro anticipates robust growth for the adoption of alternative fuels on the back of governmental reforms and push for infrastructure development.

“A crucial step will be to secure guaranteed offtake of compressed biogas by various natural gas-consuming industries to accelerate the achievement of decarbonization goals. Setting up a grid system framework, similar to solar, would enable CBG production in one location and off-take in another, while preserving the molecule’s green properties,” said Mahesh Girdhar, Managing Director & CEO – EverEnviro Resource Management.

Girdhar notes that focusing on carbon credit trading will draw more investments into CBG projects, providing much-needed cash flow for the sector. “Further, a CBG Fertilizer Synchronization scheme, requiring fertilizer units to use CBG, would greatly support the industry, akin to the CBG CGD Synchronization initiative,” he said.

The government has been emphasizing on making the country a gas-based economy while taking several initiatives to increase the share of gas in the energy mix in the recent few years. Stakeholders see the trend continuing with more emphasis given on domestic PNG (piped natural gas) connection.

“It is possible that we might see some incentive structure for city gas distribution players to improve the viability and execution of projects,” Garg has earlier said.

The industry also expects the central government to coordinate with the state governments and bring about policy initiatives such as reduction in VAT.

Budget 2024 may also focus on energy transition practices by the public sector oil and gas companies as the country moves towards attaining net-zero by 2070. In Budget 2023, the government has allocated Rs 30,000 crore for capital investments for state-owned oil marketing companies towards energy transition. The amount has not been fully released to the OMCs yet.