Analyzing the Budget 2012-13

8/2/2019 Analyzing the Budget 2012-13

http://slidepdf.com/reader/full/analyzing-the-budget-2012-13 1/13

Analyzing the Budget 2012-13

ON

Oil and Gas SectorMukesh Dave

Naman Tibrewal

Neha Jain

Nihar Chaturvedi

Nikhil Patel

Nikita Singhania

Nilesh Maheshwari

Nirmal Sakhrani

Prakash Andharia



Introduction to Budget

A budget is a financial plan for the futureconcerning the revenues and costs of abusiness.

The process for preparing a monthly budget

includes:

Listing of all sources of monthly income

Listing of all required, fixed expenses, likerent/mortgage, utilities, phone

Listing of other possible and variable

expenses



KEY HIGHLIGHTS OF BUDGET2012-2013

GDP is estimated to grow by 6.9 per cent in 2011-12, after having grown at 8.4per cent in precedingtwo years.

Central subsidies to be kept under 2 per cent ofGDP; to be further brought down to 1.75 per centof GDP over the next 3 years

Efforts to reach broad based consensus on FDI inmulti-brand retail.

Investment in 12th Plan in infrastructure to gouptoRs. 50,00,000 crore; half of this is expectedfrom private sector.



Cont’ A number of measures proposed to deter

generation and use of unaccounted money.

Fiscal deficit targeted at 5.1 per cent of GDP, asagainst 5.9 per cent in revised estimates for 2011-

12.

Central Government debt at 45.5 per cent of GDPas compared to Thirteenth Finance Commission

target of 50.5 per cent.

Medium-term Expenditure Framework Statementto be introduced; will set forth 3-year rolling target

for expenditure indicators.



Budget on oil & gas1st Announcement

The Cess on crude petroleum oilproducts increased by 80% from Rs4500/ metric ton from Rs 2500/metric

ton. Impact:-Negative for upstream oil

companies.

The companies which would beaffected by this negative impact areONGC, Oil India, and Cairn.



Budget on oil & gas2nd Announcement

There is no announcement on theexpected increase price of petroleumproducts.

Impact:- This would have a negativeimpact as this will lead to sustainedunder recoveries for upstream anddownstream companies.

The companies which would getaffected by this are ONGC, GAIL, OilIndia, IOCL, HPCL, BPCL.



Budget on oil & gas3rd Announcement

Subsidy payment to oil marketingcompanies are being made in cashand no bonds have been issued.

Impact:- This would lead to improvedworking capital management for oilmarketing companies showing a

positive impact. The companies which would have

positive impact are IOCL, BPCL,

HPCL.



Budget on oil & gas4th Announcement There has been no announcement on

exemption of customs duty on crudeoil.

Impact:- This would affect negativelyas global high prices of crude willcause increased prices for oil refining

companies. The companies which would be

affected by this are RIL, IOCL, BPCL,

HPCL.



Budget on oil & gas5th Announcement Viability gap funding will be made

available for investments in fertilizer andpetroleum transportation pipeline.

Impact:- This announcement would havepositive impact as it will increaseinvestments in the field of oiltransportation and pipeline sector.

The companies which would haveadvantage are IOCL, BPCL, HPCL,GAIL, GSPL, Indra-prasth Gas .



Budget on oil & gas6th Announcement

Natural Gas and LNG imports forpower plants exempted from customsduty (earlier duty was 5%)

Impact:- This would have positiveimpact as it will reduce cost ofimported Natural Gas and LNG for

power plants only. The companies which will gain

advantage from this are NTPC,

Reliance power, and Torrent Power.



points

)

The Excise duty structure for most petroleumproducts has been rationalized, with an advalorem levy of duty at the rate of 14% onmost products, while diesel, light diesel oil etc.

The negative for the Oil & Gas sector is theadditional cess of Rs 2000 being imposed onCrude Oil under the Oil IndustriesDevelopment Act.

exemption from Basic Customs duty on importof dredgers.

levy of cess on Additional Customs duty hasbeen withdrawn for imported goods, resultingin duty savings for the entire industry.



(The budget has fuelled hopes of a grand revival of the powersector, accelerated road projects, propped up wobbly airlines andgiven tax breaks to large projects, cheering power and road firmsbut oil firms seeking market prices for diesel and equipment makersaspiring for tariff protection were disappointed.

The government also sharply raised the cess on domestic crude oiland placed upper-class railway travel within the ambit of servicetax, although analysts said the railway ministry would resist themove, as it had done in the past.)- Interpretation of chart( dontinclude in final ppt)



Documents

Analyzing the Budget 2012-13