Lok Sabha Question No. 1964 (UNSTARRED), answered on 2023-12-14
Subject: Rising Prices of Petroleum Products
Ministry: PETROLEUM AND NATURAL GAS
Asked by: Harsimrat Kaur Badal

## LOK SABHA UNSTARRED QUESTION NO. 1964 TO BE ANSWERED ON 14 DECEMBER, 2023

## Rising Prices of Petroleum Products

1964. SHRIMATI HARSIMRAT KAUR BADAL:

## पेोलयम और ाक ृतक गैस मंी

Will the Minister of PETROLEUM AND NATURAL GAS be pleased to state:

- (a) whether the Government has observed wide-spread resentment among people of the country against  rising  prices  of  petroleum  products  like  Petrol,  Diesel  and  LPG  and  if  so,  the  details thereof;
- (b) whether the Government is aware that compared to 2014, the prices of Petrol and Diesel are almost doubled whereas the prices of LPG have trebled;
- (c) if so, the reasons for such steep rise in petroleum products;
- (d) the details of taxes levy on Petrol, Diesel and LPG; and
- (e) the steps taken by the Government to check the rising prices of the said petroleum products?

## ANSWER

## पेोलयम और ाक ृतक गैस मंालय म राय मंी ( ी रामेश ् वर तेल )

## MINISTER OF STATE IN THE MINISTRY OF PETROLEUM AND NATURAL GAS (SHRI RAMESWAR TELI)

- (a) to (e): Prices  of  petrol  and  diesel  are  market  determined  and  Public  Sector  Oil Marketing Companies (OMCs) take appropriate decision on pricing of petrol and diesel.

The Retail Selling Prices (RSP) of petrol and diesel in Delhi as on 01.04.2014 were Rs. 72.26 and Rs. 55.49 per litre and as on 08.12.2023 are Rs. 96.72 and Rs. 89.62 per litre respectively.

Government has reduced Central  Excise  duty  by  Rs.  13/  litre  and  Rs.  16/  litre  on  petrol  and diesel respectively in two tranches in November 2021 and May 2022. The excise duty reductions were fully passed on to consumers and retail prices fell as a result. The measure was aimed to give  a  further  fillip  to  the  economy  and  to  boost  consumption  and  keep  inflation  low,  thus helping the poor and middle classes. Subsequently, many States/UTs also reduced VAT rates on petrol and diesel.

Government  of  India  also  took  several  other  steps  to  insulate  common  citizens  from  high international  prices,  which  included  diversifying  the  crude  import  basket,  windfall  taxes  on export of petroleum products, invoking the provisions of Universal Service Obligation to ensure availability of petrol & diesel in domestic market, increasing the blending of ethanol in petrol, etc.

India imports more than 60% of its domestic LPG consumption. Price of LPG in the country is linked to its price in the international market. However, Government continues to modulate the effective  price  to  consumer  for  domestic  LPG.  Accordingly,  Government  reduced  the  Retail Selling Price of domestic LPG by Rs. 200 per 14.2 Kg cylinder with effect from 30 th August, 2023. Under PAHAL Scheme, the domestic LPG cylinders are sold at non-subsidised price and the applicable subsidy to the consumers is transferred directly into their bank accounts.

During the period 2020-21 to 2022-23, the average Saudi CP (international benchmark for LPG pricing) went up from $415 per MT to $712 per MT.  However, as Government modulates the effective price, the increase in international prices was not fully passed on in retail prices, due to which  the  Oil  Marketing  Companies  (OMCs)  suffered  under  recoveries  on  sale  of  domestic LPG. To compensate this,  the  Government  approved  a  one-time  compensation  of  Rs.  22,000 crore to OMCs in FY 2022-23.  During Covid pandemic, Government also provided about 14.17 Crore  free  LPG  refills  to  PMUY  households  under  Pradhan  Mantri  Gareeb  Kalyan  Package during 2020.

W.e.f. 21 st May, 2022, Government has been providing a budgetary support for targeted subsidy of Rs. 200 per 14.2 Kg cylinder for Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries for upto 12 refills a year for years 2022-23 and 2023-24. Moreover, w.e.f.  5 th October, 2023, the targeted subsidy has been further increased to Rs. 300 per 14.2 Kg cylinder for Pradhan Mantri Ujjwala Yojana (PMUY) beneficiaries. As on 01.12.2023, the effective price of domestic LPG for PMUY consumers is Rs. 603 per 14.2 Kg LPG cylinder (at Delhi).

The price of non-subsidised domestic LPG cylinder at Delhi in April 2014 was Rs. 980.50 and as on 08.12.2023 is Rs. 903 per 14.2 Kg LPG cylinder.

The details of taxes on petrol, diesel and domestic LPG as on 11.12.2023 are as under:

## Petrol and Diesel:

Excise & Customs duty: The details of Excise and Customs duty rates on Petrol and Diesel are as below:

| Product   |   Excise duty (Rs./Litre) | Customs duty                 |
|-----------|---------------------------|------------------------------|
| Petrol    |                      19.9 | 2.5 %plus 10% social welfare |
| Diesel    |                      15.8 | surcharge                    |

Effective  16.11.2023,  the  rate  of  Special  Additional  Excise  Duty  on  export  of  petrol  is  Nil whereas Re. 1/litre is levied on export of diesel.

VAT Rates: The state-wise details of VAT /Sales tax on petrol and diesel as on 08.12.2023 are given at Annexure.

## LPG:

The rates of Customs duty and GST applicable on LPG are as below:

| Particulars   | Particulars    | GST    | Customs Duty   |
|---------------|----------------|--------|----------------|
| LPG           | Domestic *     | 5.00%  | Nil            |
| LPG           | Non - Domestic | 18.00% | 5.00%          |

In addition to the above, 10% Social Welfare Surcharge is also applicable on the total duties of Customs (excluding Countervailing Duty in lieu of Integrated Goods and Services Tax) Source: Petroleum Planning and Analysis Cell (PPAC)

x-x-x-x-x

Annexure  referred  to  in  reply  to  Lok  Sabha  Unstarred  Question  No.  1964  asked  by  Shrimati Harsimrat  Kaur  Badal  to  be  answered  on  14.12.2023  regarding  'Rising  Prices  of  Petroleum Products'

VAT /Sales tax on petrol and diesel

| State/UT                                 | Petrol                                                                                            | Diesel                                                                                                                       |
|------------------------------------------|---------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------|
| Andaman& Nicobar Islands                 | 1%                                                                                                | 1%                                                                                                                           |
| Andhra Pradesh                           | 31% VAT + Rs.4/litre VAT+Rs.1/litre Road Development Cess and Vat thereon                         | 22.25% VAT + Rs.4/litre VAT+Rs.1/litre Road Development Cess and Vat thereon                                                 |
| Arunachal Pradesh                        | 14.50%                                                                                            | 7.00%                                                                                                                        |
| Assam                                    | 21.95% or Rs.16.80 per litre whichever is higher                                                  | 20.88% OR Rs. 13.60 per litre whichever is higher Rebate of Rs. 1.66 per litre subject to minimum tax of Rs. 13.60 per litre |
| Bihar                                    | 23.58% or Rs 16.65/Litre whichever is higher (30% Surcharge on VAT as irrecoverable tax)          | 16.37% or Rs 12.33/Litre whichever is higher (30% Surcharge on VAT as irrecoverable tax)                                     |
| Chandigarh                               | Rs.10/KL cess +15.24% or Rs.12.42/Litre whichever is higher                                       | Rs.10/KL cess + 6.66% or Rs.5.07/Litre whichever is higher                                                                   |
| Chhattisgarh                             | 24% VAT + Rs.2/litre VAT                                                                          | 23% VAT + Rs.1/litre VAT                                                                                                     |
| Dadra and Nagar Haveli and Daman and Diu | 12.75% VAT                                                                                        | 13.50% VAT                                                                                                                   |
| Delhi                                    | 19.40% VAT                                                                                        | Rs.250/KL air ambience charges + 16.75% VAT                                                                                  |
| Goa                                      | 20% VAT + 0.5% Green cess                                                                         | 17% VAT + 0.5% Green cess                                                                                                    |
| Gujarat                                  | 13.7% VAT+ 4% Cess on Town Rate &VAT                                                              | 14.9% VAT + 4 %Cess on Town Rate &VAT                                                                                        |
| Haryana                                  | 18.20% or Rs.14.50/litre whichever is higher as VAT+5% additional tax on VAT                      | 16.00% VAT or Rs.11.86/litre whichever is higher as VAT+5% additional tax on VAT                                             |
| Himachal Pradesh                         | 17.5% or Rs 13.50/Litre- whichever is higher                                                      | 13.90% or Rs 10.40/Litre- whichever is higher                                                                                |
| Jammu &Kashmir                           | 24% MST+ Rs.2/Litre employment cess, Rebate of Rs.4.50/Litre                                      | 16% MST+ Rs.1.00/Litre employment cess , Rebate of Rs.6.50/Litre                                                             |
| Jharkhand                                | 22% on the sale price or Rs. 17.00 per litre , which ever is higher + Cess of Rs 1.00 per Ltr     | 22% on the sale price or Rs. 12.50 per litre , which ever is higher + Cess of Rs 1.00 per Ltr                                |
| Karnataka                                | 25.92% sales tax                                                                                  | 14.34% sales tax                                                                                                             |
| Kerala                                   | 30.08% sales tax+ Rs.1/litre additional sales tax + 1% cess , Social security cess Rs.2 per litre | 22.76% sales tax+ Rs.1/litre additional sales tax + 1% cess , Social security cess Rs.2 per litre                            |

| Ladakh                                                | 15% MST+ Rs.5/Litre employment cess, Reduction of Rs.2.5/Litre                                                                                                                                 | 6% MST+ Rs.1/Litre employment cess , Reduction of Rs.0.50/Litre                                                                                                                                      |
|-------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Lakshadweep                                           | 10% VAT                                                                                                                                                                                        | 10% VAT                                                                                                                                                                                              |
| Madhya Pradesh                                        | 29%VAT + Rs.2.5/litre VAT+1%Cess                                                                                                                                                               | 19% VAT+ Rs.1.5/litre VAT+1% Cess                                                                                                                                                                    |
| Maharashtra - Mumbai, Thane , Navi Mumbai& Aurangabad | 26% VAT+ Rs.5.12/Litre additional tax                                                                                                                                                          | 24% VAT                                                                                                                                                                                              |
| Maharashtra (Rest of State)                           | 25% VAT+ Rs.5.12/Litre additional tax                                                                                                                                                          | 21% VAT                                                                                                                                                                                              |
| Manipur                                               | 25% VAT                                                                                                                                                                                        | 13.5% VAT                                                                                                                                                                                            |
| Meghalaya                                             | 13.50% or Rs13.50/Litre- whichever is higher (Rs.0.10/Litre pollution surcharge)                                                                                                               | 5% or Rs 7.00/Litre- whichever is higher (Rs.0.10/Litre pollution surcharge)                                                                                                                         |
| Mizoram                                               | 16.36% VAT                                                                                                                                                                                     | 5.23% VAT                                                                                                                                                                                            |
| Nagaland                                              | 25% VAT or Rs. 16.04/litre whichever is higher +5% surcharge + Rs.2.00/Litre as road maintenance cess , Rebate Rs. 5.5 per litre                                                               | 16.50% VAT or Rs. 10.51/litre whichever is higher +5% surcharge + Rs.2.00/Litre as road maintenance cess , Rebate Rs. 5.1 per litre                                                                  |
| Odisha                                                | 28% VAT                                                                                                                                                                                        | 24% VAT                                                                                                                                                                                              |
| Puducherry                                            | 14.55% VAT                                                                                                                                                                                     | 8.65% VAT                                                                                                                                                                                            |
| Punjab                                                | Rs.2050/KL (cess)+ Rs.0.10 per Litre (Urban Transport Fund) + 0.25 per Litre (Special Infrastructure Development Fee)+15.74% VAT plus 10% additional tax or Rs.14.32/Litre whichever is higher | Rs.1050/KL (cess) + Rs.0.10 per Litre (Urban Transport Fund) +0.25 per Litre (Special Infrastructure Development Fee) + 12.00% VAT plus 10% additional tax and or Rs.10.02/Litre whichever is higher |
| Rajasthan                                             | 31.04% VAT+Rs 1500/KL road development cess                                                                                                                                                    | 19.30% VAT+ Rs.1750/KL road development cess                                                                                                                                                         |
| Sikkim                                                | 20% VAT+ Rs.3000/KL cess                                                                                                                                                                       | 10% VAT + Rs.2500/KL cess                                                                                                                                                                            |
| Tamil Nadu                                            | 13% + Rs.11.52 per litre                                                                                                                                                                       | 11% + Rs.9.62 per litre                                                                                                                                                                              |
| Telangana                                             | 35.20% VAT                                                                                                                                                                                     | 27% VAT                                                                                                                                                                                              |
| Tripura                                               | 17.50% VAT+ 3% Tripura Road Development Cess                                                                                                                                                   | 10.00% VAT+ 3% Tripura Road Development Cess                                                                                                                                                         |
| Uttar Pradesh                                         | 19.36% or Rs 14.85/Litre whichever is higher                                                                                                                                                   | 17.08% or Rs 10.41/Litre whichever is higher                                                                                                                                                         |
| Uttarakhand                                           | 16.97% or Rs 13.14 Per Ltr whichever is greater                                                                                                                                                | 17.15% or Rs Rs 10.41 Per Ltr whichever is greater                                                                                                                                                   |
| West Bengal                                           | 25% or Rs.13.12/litre whichever is higher as sales tax+ Rs.1000/KL cess - Rs 1000/KL sales tax rebate (20% Additional tax on VAT as irrecoverable tax)                                         | 17% or Rs.7.70/litre whichever is higher as sales tax + Rs 1000/KL cess - Rs 1000/KL sales tax rebate (20% Additional tax on VAT as irrecoverable tax)                                               |

Source: Petroleum Planning and Analysis Cell