Click to play videoNew Delhi: It’s perhaps not the best time for a beleaguered Government to make policy announcements but sources in the Congress have told that contrary to media reports, the Government is not thinking of imposing a windfall profit tax on oil producers or withdrawing the tax holiday on export-oriented refineries as demanded by Samajwadi Party General Secretary Amar Singh.
“He (Murli Deora) is representative of Government. He should speak for the people, but has instead spoken for the corporate houses,” Amar Singh said.
Reliance Industries’ Jamnagar refinery enjoys the benefit and Singh's antipathy to the Mukesh Ambani group is well known.
The refinery imports crude and exports petroleum products at a profit but a Government imposed price ceiling has made its domestic retailing business unviable.
A windfall profit tax on crude will hurt ONGC more. But the former head of ONGC says that the state-owned company partially subsidises petro-fuels and that should be considered a windfall profit tax by another name.
Former CMD of ONGC Subir Raha said, “A cess is already in place. Even if the windfall tax has to be put in place, it should then contribute to a stabilisation reserve, which would contribute to the subsidy burden.”
Reliance has a minority stake in the Panna Mukta Tapti oil fields. It produces gas but prices there are controlled by the Government.
Amar Singh has accused Petroleum Minister Murli Deora of serving corporate interests, but the Minister says taxation is the domain of the Finance Minister and tax exemption for export-oriented refineries comes with in the purview of the Commerce Ministry.
(With inputs from Nayantara Rai)
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