FICCI recalled Parliament recently passing the Oilfields (Regulation and Development) Amendment Act, 2025, providing fiscal stability to upstream E&P operators

The recent hike in GST on capital goods used in oil, gas, and coal bed methane sectors undermines the stable contractual and fiscal terms promised in the recently approved oilfields legislation, an industry association said in a letter to Oil Minister Hardeep Singh Puri.

In the second letter to the minister this month, the Federation of Indian Chambers of Commerce and Industry (Ficci) on September 25 said the increase in GST on capital goods used for petroleum (including natural gas) and coal bed methane (CBM) sectors from 12 per cent to 18 per cent places an added burden on an industry which already was facing a disadvantage because of non-inclusion of natural gas under GST.

"This (GST increase) is against the various upstream exploration & production (E&P) contracts signed and will further raise the project costs in the sector that demands high-risk capital and long-gestation investments," Ficci wrote.

"It discourages further investments, undermines domestic production, and runs contrary to the national goals of energy security and Make in India." The industry body recalled Parliament recently passing the Oilfields (Regulation and Development) Amendment Act, 2025, providing fiscal stability to upstream E&P operators.