Page 40 - Policy Economic Report - September 2024

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Key Policy developments/Significant news in Energy sector

Govt. slashed windfall tax on crude petroleum to nil

The government slashed windfall tax on domestically produced crude oil to 'nil' per tonne with effect from
September 18.

The Special Additional Excise Duty (SAED) on export of diesel, petrol and jet fuel or ATF has been retained
at ‘nil’.

India initially introduced the windfall tax in July 2022 in response to the escalating price of crude oil. This
tax is imposed by governments when an industry unexpectedly generates substantial profits, typically
attributed to an unprecedented event. A windfall tax is imposed on domestically produced crude oil when
the rates of the global benchmark exceed $75 per barrel. For the export of diesel, aviation turbine fuel
(ATF), and petrol, the levy is applicable when the product cracks, or margins, surpass $20 per barrel.

Minister Hardeep S Puri Highlights India’s Ambition to Lead Global Green Hydrogen Market at 2nd
International Conference on Green Hydrogen

Shri Hardeep Singh Puri, Minister of Petroleum and Natural Gas, addressed the inaugural session of the
2nd International Conference on Green Hydrogen (ICGH), highlighting India's commitment to becoming a
global leader in green hydrogen production and export. The conference, which took place from September
11-13, 2024, at Bharat Mandapam, was organized by the Ministry of New and Renewable Energy, the
Office of Principal Scientific Advisor, the Department of Scientific and Industrial Research, the Department
of Science and Technology, and the Ministry of Petroleum and Natural Gas.

In his address, Minister Shri Hardeep Singh Puri expressed his strong belief in green hydrogen’s potential
as the "fuel of the future" and emphasized India's capacity to lead in both production and export of green
hydrogen and its derivatives. He outlined several initiatives by the Ministry of Petroleum and Natural Gas
(MoP&NG) to boost hydrogen production in India. Currently, he said that around 54% of the country's
annual hydrogen consumption is used in the petroleum refining sector. The Ministry is ensuring uptake of
Green Hydrogen into refineries and City Gas Distribution (CGD) systems through public and private
sectors, he said. Minister further informed that the Public Sector Undertakings (PSUs) under MoP&NG
have set a target to produce over 1 million metric tons (MMT) of green hydrogen by 2030 and are in the
process of floating tenders for its procurement on a Build-Own-Operate (BOO) basis, with an initial
capacity of ~42 kilo tons per annum (KTPA), expected to rise to 165 KTPA.

Additionally, the Minister said that Cochin International Airport Limited (CIAL) has signed a Memorandum
of Understanding (MoU) with Bharat Petroleum Corporation Limited (BPCL) to develop the first Green
Hydrogen plant in the aviation sector. Indian Oil Corporation Limited (IOCL) has also handed over a state-
of-the-art green hydrogen fuel cell bus to the Indian Navy, and Gas Authority of India Limited (GAIL) has
established a plant in Vijaipur, Madhya Pradesh, capable of producing 4.3 tons per day (TPD) of hydrogen
using a 10 MW Proton Exchange Membrane (PEM) Electrolyser, he said.

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