Petroleum Ministry has asked the Finance Ministry to make excise rates uniform for different categories of domestic cooking gas (LPG), Oil Minister Dharmendra Pradhan said on Thursday. There is no excise duty on a 14.2-kg of subsidised LPG cylinder, but a similar sized non-domestic bottle attracts 8 per cent levy.
Besides, while a subsidised domestic cylinder is exempt from customs duty, a 5 per cent import duty is levied on non-domestic LPG cylinder. “We have sought from Ministry of Finance a uniform tax pattern for all kinds of LPG customers,” Pradhan told reporters here.
LPG or domestic cooking gas, is sold in different pack sizes - 5 kg, 14.2 kg and 19 kg. A household customer is allowed 12 cylinders of 14.2-kg each or 34 cylinders of 5 kg each during a year at subsidised rates. Any requirement beyond this has to be bought at market rate.
The subsidised LPG cylinders are exempt from excise as well as customs duty but not the other categories including 19-kg commercial cylinders. This anomaly has led to diversion or black-marketing of subsidised cylinders for other uses.
“What we found is there are different tax patterns for different categories of customers - subsidised, non- subsidised, commercial and industrial. If there is not much impact on revenue due to having a uniform tax pattern, it will further help keeping stop black marketing,” he added. Government plans to increase LPG cover to 75 per cent of the households in the country in next four years from the current coverage of 60 per cent.
Pradhan also said India is seeking to increase import of crude oil as well as raise its level of energy engagement with Africa. He added: “Today, Africa contributes 17 per cent of our requirements in crude oil. We want to raise it through increasing our exploration and production activities and procuring more crude oil with a favourable price formula.”
India is looking at acquiring oil and gas fields as well as taking up refinery, pipeline and gas distribution projects in Africa. Moreover, India plans to shift to Euro-VI emission compliant petrol and diesel by 2020 to cut carbon pollution, Oil Minister Dharmendra Pradhan said.
“We already have BS-III, equivalent to Euro-III specifications, across the country and BS-IV, in major cities which will shortly be extended to the entire country. A revised Auto Fuel Policy is in the offing which will lead to introduction of BS-VI fuels by 2020,” he said.
Oil refineries will need to invest Rs 80,000 crore in upgrading petrol and diesel quality to meet cleaner fuel specifications by 2020. Addressing a workshop on ‘Carbon Emission Management’, he said the fuels meeting Euro-IV or Bharat Stage (BS)-IV specifications are to be supplied throughout the country by April 2017 and BS-V or Euro-V grade fuel by April 1, 2020.
But now instead of stepwise upgradation from BS-IV to BS-V and then from BS-V to BS-VI, the government is planning to switch over directly from BS-IV to BS-VI auto fuels by April 1, 2020. BS-IV fuels contain 50 parts per million (ppm) sulphur, while BS-V and BS-VI grade fuel will have 10 ppm sulphur.
Oil refineries had previously upgraded technology and invested over Rs 55,000 crore for production and supply of BS-III/IV fuels. Another Rs 80,000 crore investment would be required for further upgradation.
Currently, BS-IV auto fuels are being supplied in whole of northern India covering J&K, Punjab, Haryana, Himachal Pradesh, Uttarakhand, Delhi, parts of Rajasthan and western UP. The rest of the country has BS-III grade fuel. From April 1, 2016, all of Goa, Kerala, Karnataka, Telangana, Odisha, Union Territories of Daman and Diu, Dadra and Nagar Haveli and Andaman & Nicobar will get BS-IV fuel.