Petroleum Minister Murli Deora sought tax rationalisation on petroleum products and infrastructure status on Friday to oil and gas exploration business as well as pipelines to encourage the sector.

"We have forwarded our tax rationalisation proposals in our pre-budget consultations for consideration of the Finance Minister P Chidambaram. I am very hopeful that the petroleum sector should be hearing good news from the finance minister in months to come," Deora said at a function to mark doubling of Indian Oil Corporation's refinery in Panipat, Uttar Pradesh. 

The minister also requested Chidambaram to grant infrastructure status to natural gas pipeline for rapid development of piped natural gas supply to major cities in India as well as supply the fuel to industrial centres.

The ministry has in its Budget wish-list demanded that oil and gas exploration business as well as pipelines be granted infrastructure status to encourage prospecting in unexplored basins.

The official said for giving fillip to E&P activity, the ministry wanted the business to be granted infrastructure status entailing a 10-year tax holiday to companies.

Besides E&P business, the ministry has sought tax holiday for LNG import and re-gasification projects, cross-country pipelines for crude, gas and petroleum products and crude and product import facilities, he said.

Sources said the ministry has sought zero customs duty on capital goods imported for new refineries and refinery expansion.

The ministry also wanted basic customs duty reduced on projects imports to zero for crude, product and gas pipelines and CNG/auto LPG infrastructure.