New Delhi — India has decided to cut import duty on LNG to 2.5% from 5% to encourage the use of natural gas in the country, finance minister Arun Jaitley said while presenting the national budget for fiscal 2017-2018 Wednesday.
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The revised rate will come into force when the new fiscal year starts on April 1, a finance ministry official said.
In October, oil minister Dharmendra Pradhan had said that India would aim to raise the share of gas in the energy basket to 15% from 6.5% currently in the next three to four years.
India's share of natural gas in the energy basket is low compared with the global average of 24%.
New Delhi plans to more than double its LNG imports to 50 million mt by 2020 from 19.2 million mt in 2016, according to data from Platts Analytics.
Indian LNG demand is expected to grow 38% year on year in 2017 as infrastructural and regulatory barriers are eased while contractual LNG volumes are raised, Platts Analytics data showed.
Market sources said, however, that they had expected a complete removal of duty on LNG imports, bringing it in line with crude oil, on which no import tariffs are imposed.
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