The Government has estimated that Liquefied Natural Gas will be price competitive to alternate fuels in the country after the Budget. In a press statement, the Ministry of Petroleum and Natural Gas noted, "The reduction of Customs duty on LNG from 5 per cent to 2.5 per cent is going to be to the tune of Rs 900 crore." The government has based its calculations based on LNG consumption in financial year 2015-2016.

The Government also noted that import of LNG is being carried out under the Open General License (OGL) scheme in the country. At present, LNG accounts for 50 per cent of the gas demand of various sectors in the country. The press statement noted that LNG import is expected to rise in future for catering to the rising demand of energy from industries.

However, industry representatives told BusinessLine that the benefit from duty reduction will be nullified due to the fall in the value of the rupee and firming up LNG prices.