Fuel price hike: Centre wants states to club petrol under GST, says Pradhan

Govt is also working on larger roadmap to rationalise process of selling ethanol for mixing in petrol

In the backdrop of high petrol prices pinching the common man, petroleum minister Dharmendra Pradhan today said the Centre had recommended the states to bring petroleum products under Goods and Services Tax (GST).

Besides, the Centre is also working on the larger roadmap to rationalise the process of selling ethanol for mixing in petrol, Pradhan told Business Standard on the sidelines of a central government programme here today.

He said beyond the purview of clubbing petroleum products under GST by respective states, the proposed blending of ethanol with fossil fuels would go a long way in slashing oil import bill while helping farmers get remunerative prices.

Since, Uttar Pradesh is the country’s largest sugarcane producer, and following glut in sugar market, the Yogi Adityanath government is also looking at expanding the cane byproduct basket to insulate the farmers from seasonal fluctuations.

There is a provision of ethanol blending up to 10% in fossil fuels, which the Centre wants to harness optimally to help farmers and cool retail petrol prices. On the lines of crude treated as raw material for petrol and diesel, the Centre wants ethanol following suit going forward.

Pradhan had arrived in Lucknow yesterday to promote bidding for city gas distribution licenses. Today, he chaired another stakeholders meeting here.

Meanwhile, CPI (M) general secretary Sitaram Yechuri slammed the Narendra Modi government for not cutting central excise duty on petroleum prices and instead goading the states to bring fuel under GST.

“The states have limited financial resources and bringing fuel under GST would depress their revenue resources. Over the past 4 years, the Modi government has hiked central excise duty 11 times even when the crude oil prices were on a slide. Instead of giving succour to the common man following low crude prices, the Centre did not pass on the benefits to people,” he said at the state party office here this evening.

Meanwhile, Pradhan has also asked UP to review existing VAT on household gas supply, which stands at 10%. “The state government has reduced VAT on gas, but to encourage further investment, we urge the UP government to review existing VAT structure and slash it further, especially for domestic households. It would be welcome if you (Yogi) do it for industrial input since a mandatory condition for export is the use of clean fuel for production,” he said yesterday in the presence of Adityanath.

The union minister also said an investment of Rs 500 billion would be made in UP towards ramping up infrastructure of piped natural gas. Around 2,000 km of gas pipelines have been laid in UP, while the same would be expanded by another 1,000 km. Additional expenditure of Rs 100 billion would be incurred for developing infrastructure for household piped gas supply in the state.