A study conducted by Shell has reported that the existing taxation norms may not make the setting up of an integrated refinery cum petrochemicals hub in India commercially sustainable. Shell's analysis uses the present Indian SEZ taxation rules.
Since the refining industry has a history of cyclic profitability, future regional refining margins are uncertain in case of a standalone refining unit. High margins seen in 2004 and 2005 are unlikely to continue for long since such margins would encourage large scale investments in refining resulting in overcapacity. Overcapacity will definitely drive down margins, just like in 2000-02.
13-Jan-06 
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