Delivered LNG will be 22% cheaper after new policy

Vol 6, PW 21 (18 Dec 02) People & Policy
     

NEXT QUESTION: HOW much cheaper will LNG be when India's cabinet approves the 'Integrated LNG Policy' and it becomes reality Well, cheaper by 22%, according to the oil ministry.

Responsible for this sharp reduction in price is the elimination of import tariffs on LNG and on equipment for LNG terminals as well as the introduction of a uniform national sales tax of 4%. See below: Existing scenario After new LNG policy Sales tax 22% (highest in India - Gujarat) 4% (uniform national sales tax) Import tariff 5% Nil Income tax holiday Not available Available Import tariff on capital imports Not available Available LNG price $/mmbtu Rs/1,000cm LNG price $/mmbtu Rs/1,000 cm Japanese crude cocktail $20 per barrel $20 per barrel Gas/LNG FOB price 2.53 4, 884 2.53 4, 884 LNG shipping cost 0.29 560 0.29 560 Import tariff 0.14 272 Nil Nil Regassification charges 0.65 1,245 0.55 1,063 Gas/LNG price ex-terminal 3.61 6,962 3.37 6,507 Sales tax 0.79 1,532 0.13 260 Pipeline charges and marketing margin 0.55 1,051 0.55 1,051 Delivered price 4.95 9,544 4.06 7,818