The government will not be able to impose windfall tax on oil and gas producers after a new law comes into place following the passage of the oilfield development bill by Parliament, petroleum and natural gas minister Hardeep Puri said on Wednesday.
Lok Sabha last week passed the Oilfields (Regulation and Development) Amendment Bill, 2024, aimed at boosting the country’s exploration sector by ensuring policy stability, scope for international arbitration and longer lease for oil and gas companies.
After the bill becomes a law, the petroleum and natural gas ministry will formulate regulations in consultation with the industry, Puri said.
In the past, the retrospective tax and windfall tax on oil and gas producers shook investor confidence. The UK’s Capricorn Energy, previously called Cairn Energy, fought a protracted legal battle to defend itself against the government’s retrospective tax demand. Similarly, companies protested the imposition of windfall tax on oil and gas producers in 2022.
Source #ET
