The inability of jet fuel producers to obtain input tax credits on GST paid for inputs like manufacturing and refining equipment raises overall prices.

Aviation Turbine Fuel to be subjected to GST, natural gas inclusion also likely: Puri

According to Union Petroleum and Natural Gas Minister Hardeep Singh Puri, Aviation Turbine Fuel (ATF) would soon fall within the purview of the Goods and Services Tax (GST), the Economic Times reported. Given that ATF accounts for around 40% of airlines’ operating costs, this action could greatly lessen their financial burden. The inability of jet fuel producers to obtain input tax credits on GST paid for inputs like manufacturing and refining equipment raises overall prices. Ultimately, airline operations and ticket costs are impacted by the cascading tax burden. Additionally, the administration is thinking about incorporating natural gas into the GST. States that initially opposed it, like Gujarat, Maharashtra, and Andhra Pradesh, are now realising the advantages of this move, according to Puri. Natural gas inclusion would lower production costs in gas-dependent businesses and streamline the tax code if it were put into effect.

Increased purchase of US oil and gas likely for India after Trump’s announcement 

India is likely to buy more oil and gas from the US now that Donald Trump has said he wants to enhance production, Reuters reported. Hardeep Singh Puri, India’s oil minister, told reporters that “more US energy coming into the market is welcome” and that “there is a possibility of more energy purchase between India and US.” Refiners in India—who import more than 80% of its oil from Russia—have been severely impacted by an increase in global oil prices and transportation charges. This is because Washington recently implemented broad new sanctions targeting Russian insurers, tankers, and oil producers. 

However, US sanctions on Russian oil won’t affect India’s energy security, IndianOil Chairman Arvinder Singh Sahney has said. The Americas, the Gulf, Africa, and newer suppliers like Brazil are the sources of crude for India. Only a small percentage of Russian oil exports are impacted by the current sanctions, he added, guaranteeing Indian refineries a steady supply of crude.

EU open to buy US energy to avoid tariffs, major US LNG supply to kick in by 2027

President Donald Trump of the United States, the largest LNG exporter in the world, has threatened to impose taxes on Europeans if they do not increase their purchases of petrol and oil from the US, the Reuters reported. To avoid tariffs, the European Union is willing to talk about buying weapons and energy from the US. Trump has pledged to either impose taxes on more oil and gas exports or solve the long-standing goods trade gap with the EU. Referencing the retaliatory levies the EU put on U.S. imports when EU steel and aluminium were subject to tariffs during Trump’s first term, European Commission Executive Vice President Valdis Dombrovskis stated that the EU would protect its rights and interests if tariffs were applied. When Russia cut off the majority of gas supply to Europe in 2022 following its invasion of Ukraine, U.S. LNG imports had proven useful.

According to a Bloomberg story, a senior Exxon Mobil Corp. official stated that although the United States is currently the EU’s largest supplier of liquefied natural gas, new supplies of the gas take time to generate and major additional capacity will only start to kick in over the coming years. According to the paper, other US export initiatives will begin increasing production as well, although the majority of the additional supply won’t arrive until 2027.

Wall Street to thwart Donald Trump’s proposal for a US oil surge, say Shale executives

According to the Financial Times, Wall Street’s unwillingness to authorise another drilling spree is likely to derail President Donald Trump’s push for a new oil boom. The report said that the United States’ total oil production will increase by less than 1.3 million barrels per day during Trump’s second term. This is far less than the shale bonanza years of the previous decade and far less than the 1.9 million barrels per day increase that was accomplished under Joe Biden. Executives have said that Trump’s efforts to usher in a period of “American energy dominance” would be hampered by investor pressure on businesses and the economic reality of an industry that is constantly dependent on oil prices. Trump, on the other hand, is relying on a significant increase in oil production to lower US inflation by lowering the cost of products and fuel. However, the report has cautioned that shale companies would become less profitable if oil and gas prices dropped. They would also be less inclined to obey Trump’s directive to ‘drill, baby, drill’.

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