Union Petroleum Minister Dharmendra Pradhan, while talking to India Today, said that an uniform tax structure for petroleum products across the nation will be realised soon. Efforts are being made in GST Council to develop a consensus among states to bring petrol and diesel under the GST and the success of the tax regime will lead to this outcome soon.
On the question of why the centre is not slashing the excise duty on petrol and diesel to set an example for states to follow, Pradhan said, "Excise duty in not the only factor in fuel prices. Value added tax levied by states VAT is also an important factor."
As to why the centre is not persuading the BJP-ruled states to cut sales tax on petrol and diesel and support their inclusion in the direct tax regime, Pradhan reasoned that different state has its unique economy and have their own expectations and expenses. Developing a consensus among states in the GST Council to bring petroleum products under the ambit of the GST is the only way to bring tax uniformity in the transportation fuel.
Pradhan was answering questions on the 1 paise relief in petrol and diesel prices after continuous increase for 16 days. This meagre price cut came after the Indian Oil Corporation website showed the price of petrol in Delhi down by 60 paisa to Rs 77.83 and diesel by 56 paisa to Rs 68.75. The oil marketing company dismissed the 60 paisa decline as a technical glitch.
Even though today's incident is the company's fault, I'm taking responsiblity as the oil companies are led by the petroleum minitry, Pradhan said, apologising for the faux pas.
Answering a question about the centre's intervention in fuel prices, Pradhan said, "The government has nothing to do with daily pricing mechanism (of petrol-diesel). (Oil) companies are independent and autonomous to fix their own prices."
The Petroleum Minister reiterated the same reply when asked why the fuel prices did not change during the 19-day freeze in the run up to the Karnataka polls despite rising international prices if there was no pressure on oil companies from the centre.
"Today international crude oil prices, fluctuation in the dollar-rupee exchange rate, and centre-state tax component, are three factors affecting the prices. Government is working to strike a balance between these three factors."
We need holistic approach towards managing all these factors as even if we intervene in one factor, it will affect the other factors.
"OPEC countries have reduced their production. They are producing nations, they want more price for their produce. We are a consuming nation, we need reasonable prices. For the last three years, India has been raising this issue before all international forums."
The US sanctions against Iran and political instability in Venezuela is also affecting international prices, Pradhan added.
Meanwhile, Kerala has reduced tax levies on transportation fuel by Re 1. The change in tax rates will be effective from June 1.