India, the world’s fourth-largest buyer of liquefied natural gas (LNG), has announced plans to halve its basic customs duty on imports of the chilled fuel.
Indian Finance Minister Arun Jaitley presenting
the Budget for 2017-18 in Parliament halved the import duty on LNG to 2.5 per cent, a move that will help cut cost of power and fertiliser production.
"Considering the wide range of use of LNG as fuel as well as feed stock for petro-chemicals sector, I propose to reduce the basic customs duty on LNG from 5 per cent to 2.5 per cent," he said.
The state of Gujarat will
be the largest beneficiary of the reduction in the basic custom duty on the LNG. It currently has 27.5 million tonnes of installed LNG capacity at two ports - largest in the country, while three more ports are in the pipeline to come up with combined capacity of 15 million tonnes per annum.
India’s LNG imports have been rising steadily in the least 12 months, boosted by low prices of the chilled fuel. The government had earlier stated its intent to more than double its annual LNG import capacity to 50 million tonnes in the next few years.
India’s natural gas demand
is expected to rise from 473 million standard cubic meter per day (mmscmd) now to 494 mmscmd in 2017-18 and 523 mmscmd in 2018-19.