Centre ready to bring fuel under GST, says Petroleum minister

The Centre is ready to bring petrol and diesel under the GST regime but it is unlikely the states will agree to such a move, petroleum and natural gas minister Hardeep Singh Puri told reporters on Monday (November 14).

The states have to agree if the Centre wants to bring petrol and diesel under the GST, said the minister. “If the states make the move, we are ready. We have been ready all along. That’s my understanding. It is another issue how to implement it. That question should be addressed to the finance minister,” said Puri.

The minister, however, pointed out that it is unlikely the states will agree to such a move as liquor and energy are revenue generating items for them.

According to the minister, this is not difficult to understand since they (states) get revenue out of this. “One who is getting revenue, why would he leave it? Liquor and energy are two things that generate revenue. It is only the Central government which is worried about inflation and other things,” he added.

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The Union minister said the Kerala high court had suggested that the issue be placed before the Goods and Services Tax (GST) Council for discussion at its last meeting in Lucknow. But, the finance minister of Kerala did not agree, he said, adding that as far as GST is concerned, “your wishes and my wishes apart”, we are in a cooperative federal system.

Replying to a question on whether people can expect some respite in terms of fuel prices, the minister said India has seen one of the lowest hikes in these prices in the past one year. “I am surprised by your question. In lighter vein, people are asking me when the prices will rise again. In North America, the fuel prices went up by 43 per cent in one year but in India it went up by only two per cent,” said Puri.

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Further, he said, “If there is a bright spot anywhere in the world, it’s India. It is not me saying it, it is Morgan Stanley. It’s the managing director of IMF saying this.” The minister said India has been able to insulate itself from the rising fuel prices by taking a number of steps, including reducing the excise duty by the Centre.

“There are some countries in our neighbourhood which have fuel shortages, and prices are exorbitant. But we did not have shortages even in the remote areas of the country. It has been a very strong navigation at the level of the Centre and the states. What will happen in the future it is difficult to say,” he pointed out.

During COVID in March 2020, the price of an oil barrel had come down to US$19.56, which is now US$ 96, he said, adding that he answers hypothetical questions but the efforts of the Central government will be that prices remain stable.