BHUBANESHWAR: Under fire from opposition parties over unprecedented fuel price hike, Union Minister for Petroleum and Natural Gas Dharmendra Pradhan once again appealed to the State Government to consider reduction of VAT on petrol and diesel.
“Several factors are responsible for the surging oil prices which are beyond the control of the Government. Soaring prices of global crude oil and fluctuation in currency exchange rates are the two major factors,” Pradhan told a media conference here on Thursday.
Reduction of Central excise and VAT is the only way for the Centre and the States to bring down the fuel price. The Centre has already reduced the excise duty by Rs two per litre in October last year.
“I had appealed to the State Government then to take a similar step by reducing the VAT on petrol and diesel to reduce the burden on the consumers. However, the State rejected my request,” he said. “I have no hesitation to appeal the State Government once again to consider a tax reduction on the two essential items,” Pradhan said.
Acknowledging the resentment of the people as genuine, the Union Minister said the Centre is fully seized of the matter and is trying to work out a solution to deal with the situation. Pradhan, who had a series of meetings with oil marketing companies and Ministry officials in the last two days, criticised the ruling BJD for its decision to protest the fuel price hike instead of advising the Government to reduce VAT.
The Petroleum Minister said several States have already reduced VAT on petrol and diesel while States like Goa are collecting only 12 per cent tax on petroleum products.
Noting that a bulk of the Central tax was spent on development works, Pradhan said 42 per cent of the tax goes to the States while 70 per cent of the rest is provided for different Centrally sponsored schemes.
Reiterating the proposal of the Oil Ministry to bring petroleum products under the purview of GST, Pradhan said all the States should endorse his proposal.
On the other hand, Finance Minister Sashi Bhusan Behera said 26 per cent VAT imposed by Odisha on petroleum products is one of the lowest in the country. The Central Excise is much higher than the tax imposed by the State Government. Lashing out at the Centre, Behera said the Union Minister is trying to cover up the failure of the Centre by shifting the blame to the States.