Qatar's Rasgas Seeks Inclusion Of Natural Gas In GST
New Delhi: Qatar's RasGas, the largest LNG exporter to India, today sought inclusion of natural gas in the Goods and Services Tax (GST) regime to make taxes on the green fuel uniform and spare consumers from cascading multiple levies.
Speaking at the Petrotech conference here, RasGas CEO Hamad Mubarak Al Muhannadi said India lacks infrastructure to support a gas-based economy and needs more LNG import terminal to unlock demand.
The country currently has two fully operational import facilities in Gujarat - Petronet LNG Ltd's 15 million tonnes Dahej terminal and Shell's 5 million tonnes Hazira terminal, and two partially operating ports - Dabhol in Maharashtra and Kochi in Kerala.
While the 5 million tonnes Kochi terminal operates at less than 10 per cent of the capacity in absence of pipelines to carry gas to customers, lack of breakwater facility at Dabhol makes the facility inoperational during raining season.
Also, the pipeline infrastructure in the country is mostly concentrated in western and northern India, leaving southern and eastern parts untouched. India, the Asia's third-largest economy, will become the world's second-largest spot and long-term LNG buyer this year, Muhannadi said.
Commending India for adopting the progressive GST regime which will replace a host of state and central levies including VAT, excise duty and service tax with a single tax, he questioned keeping natural gas LNG out of the new indirect tax regime.
"We should ask why is LNG and natural gas not part of GST while competing fuels of LPG, naphtha and fuel oil are," he said.
Petroleum products like kerosene, naptha and LPG will be under the ambit of GST, while five items in the basket - crude oil, natural gas, aviation fuel, diesel and petrol - have been excluded during the initial years.
RasGas supplies 8.5 million tonnes per annum of LNG to India on long-term contracts and inclusion of natural gas and LNG in GST would make the fuel cheaper by eliminating multiple taxes, thereby making the fuel affordable for consumers. He said RasGas is seeing preference for short-term LNG contracts from customers in India.
ExxonMobil Gas and Power Marketing's VP LNG Richard Guerrant said there would globally be 175 million tonnes of incremental LNG by 2023.
Global LNG oversupply situation will not last long and global natural gas demand is likely to rise by 50 per cent between 2014-24, he said adding India, China and Taiwan will see steady LNG demand rise.
Stating that meeting additional LNG demand would be difficult despite new projects, Guerrant said financing may be major challenge for upcoming LNG projects.
Speaking at the IEF-IGU Ministerial Gas Forum, held as part of the Petrotech event, Qatar's Energy Minister Mohammed Sada said energy is central for developmental goals and economic growth of any nation.
Natural gas is the fuel of choice for sustainable energy, economic and social development, he said pitching for a closer cooperation between producers and consumers to develop a win-win situation for all, not only stimulate natural gas demand worldwide, but contribute immensely to keep the plant green.
"Ensuring the availability and accessibility of reliable source of energy is a pivotal challenge the world faces today.
Fossil fuel continues to have a dominant share of this reliable primary energy source. Asia, especially non-OECD Asia represented by China and India, will be the main sources of not only economic growth, but also energy demand," he said.
Asia, he said, requires access to affordable and sustainable energy to increase its living standards and to provide with cleaner energies and clean air.
"In this regard, I may say natural gas is well positioned to fulfill all other requirements of economic and social development. By 2040, fossil fuels will continue to dominate the energy landscape and are likely to account for 75 per cent of total energy mix. The coming 25 years is expected to see growing demand for natural gas as consumers seek an energy source that support economic development, while addressing environmental concerns," he said.
Quoting a recent IMF report, he said global growth in 2016 will close at 3.1 per cent, revised down by 0.1 per cent.
"Projections for 2017 reflect a more subdued outlook for advanced economies. Prospect differ sharply across countries and regions, with emerging Asia in general and India in particular. India recorded a GDP growth of 7.3 per cent in second quarter in this fiscal year 2016-17 showing a robust growth. It remains the world's fastest growing economy," he said.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
