Budget 2026: Oil Industry Demands Lower GST, LPG Compensation, Infrastructure Status

• India's $433.8 billion oil and gas industry seeks tax relief and compensation for LPG under-recoveries in Budget 2026-27.
• The industry proposes including crude oil and natural gas under a 5% GST slab to simplify taxation and reduce burden.
• Concerns raised over increased GST rates (12% to 18%) on oilfield equipment and services, with hopes for reduction to 5%.
• Oil marketing companies may seek Rs 30,000 crore compensation for LPG under-recoveries, as per ICRA estimates.
• Long-standing demand for infrastructure status for natural gas to improve financing and credit opportunities, along with a petroleum financing fund.

Why It Matters: India's oil industry seeks significant tax reforms, GST inclusion, and financial support in Budget 2026 to boost domestic exploration and reduce import dependence.