Oil Minister Pradhan Says Natural Gas Should Be Brought Under GST
Demand for conventional fuel will grow even after introduction of electric vehicles, says Pradhan
Petroleum Minister Dharmendra Pradhan batted for natural gas to be brought under the Goods and Services Tax.
"Natural gas is a cleaner fuel than coal. If coal can be brought under 5 percent GST, then why not natural gas?" he said. He would take up the issue with the Finance Ministry, Pradhan said.
“We want to make the country a gas-based economy. After a long time, we have started capital spending in the gas economy... to make a gas grid,” he said at KPMG Energy Conclave in New Delhi on Tuesday.
Natural gas along with petrol, diesel, crude oil and aviation fuel are excluded from GST. Recently, industry association Ficci wrote to Finance Minister Arun Jaitley to include the fuel in the 5 percent GST slab. Keeping natural gas out of the GST has increased the costs of power producers, it said.
India is aiming to raise the share of gas in the energy basket to 15 percent from the current 6.5 percent in the next three to four years.
Pradhan said that conventional fuel demand is expected to grow along with electric vehicles. India will consume 25 percent of the world's energy in next 25 years, compared to 6 percent now, he said.
"Globally, all economies have multiple sources of energy. For the consumption rate of India, we will need to have multiple sources of energy," he said. Renewable conventional, coal, nuclear, all kinds of sources will be required, he added.