Hardeep Singh Puri calls for consensus on bringing petrol and diesel under GST, ET EnergyWorld

Pune: Union Minister of Petroleum and Natural Gas Hardeep Singh Puri on Friday called for a consensus on bringing petrol and diesel under Goods and Services Tax.

Delivering a lecture on ‘Strategy and Measures to Enhance India’s Energy Security in the Next Decade’ at the 14th Foundation Day Lecture at the Pune International Center (PIC), he said, “I have heard a suggestion that petrol and diesel should now be brought under GST petrol and diesel under GST is something I have been advocating for a long time. Now I am absolutely sure that my senior colleague, the Finance Minister, has also spoken several times about bringing fuel under GST.”

To enhance its energy security, India must focus on strategic oil reserves and prioritize exploration and production to reduce its heavy dependence on imported fuel.

Puri emphasized that India, with a population of 1.4 billion and a projected energy consumption three times higher than the global average, could become a key player in the global energy landscape. He noted that over the next two decades, India will account for 25 percent of global energy consumption growth.

Puri stressed that achieving this requires the unanimous consent of all countries and recognizes the challenges of convincing countries to agree as petrol and diesel are significant sources of revenue for them.

In fact, he noted that states are unlikely to agree to this move because the main sources of revenue are alcohol and energy.

For this to happen, states must initiate this process and the central government is ready to cooperate. Puri pointed out that the Kerala High Court had suggested that the issue be discussed at the GST Council, but the Kerala Finance Minister did not agree.

He said non-BJP states were not willing to give up additional VAT.

“As far as I remember, the Kerala High Court had last year suggested that the GST council should take up this matter as part of its agenda and I remember that in the Allahabad meeting this issue was also raised, but as you know, the GST council works on the principle consensus and unanimity and the chief ministers of state must agree. Currently, we are in a situation where the BJP-ruled states have reduced VAT and the non-BJP states are not even willing to give up the additional tax. VAT, so I don’t see this happening,” he added.

Reflecting on India’s long history in oil exploration, dating back to the discovery of oil deposits in Digboi, Assam, in the 1880s, he said the government’s approval to exploit one million square kilometers of sedimentary basin sends a positive signal to investors.

He identified three main challenges to energy security: availability, affordability and the transition to renewable energy sources. Puri also mentioned that while green hydrogen is the fuel of the future, its success depends on local demand and production, and technological advances can help overcome the associated cost challenges.

Referring to global oil markets, he noted that there is no shortage of oil in the world, but growing geopolitical tensions may lead to an increase in oil prices. He added that with the emergence of new energy sources, traditional oil cartels will have less influence.

In his concluding remarks, Dr. Raghunath Mashelkar, President, PIC, reiterated the importance of reducing India’s fuel import bill and supporting renewable energy initiatives.