Hardeep Singh Puri Urges States to Consider Petrol, Diesel Under GST (Image: X/HardeepSPuri)

Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri urged for consensus on bringing petrol and diesel under the Goods and Services Tax (GST) during a lecture at the Pune International Centre’s 14th Foundation Day on Friday. He stated that he and the finance minister have long supported this move to bring it to existence. Puri highlighted India’s significant energy consumption which is projected to be three times the global average making it a key player in the global energy arena.

“I have heard a suggestion to bring petrol and diesel under GST, now petrol and diesel under GST is something that I have been advocating for a long time. Now I am very sure that my senior colleague, the finance minister, has also spoken about bringing fuel under GST on several occasions,” Puri said.

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He also stated that India needs to focus on strategic petroleum reserves exploration and production to reduce reliance on imported fuel to enhance energy security. India is expected to contribute 25% of the world’s energy consumption growth over the next two decades with a population of 1.4 billion, he added.

He pointed out that achieving consensus requires unanimous approval from all states which is challenging since petrol and diesel are significant revenue generators. States are unlikely to agree due to liquor and energy being major revenue sources. The Kerala High Court suggested discussing this in the GST Council, but Kerala’s finance minister disagreed and non-BJP states are unwilling to forego additional VAT (Value Added Tax), he stressed.

Puri reflected on India’s oil exploration history which dates back to the 1880s in Digboi, Assam. The government’s clearance of one million square kilometres of sedimentary basin for exploitation sends a positive signal to investors. He identified three primary energy security challenges: availability, affordability, and transitioning to renewable energy sources.

He also noted green hydrogen’s potential as a future fuel which is dependent on local demand and production and technological advancements can overcome associated cost challenges. He stated there’s no shortage in global oil markets, but rising geopolitical tensions may increase oil prices. Puri also reminded that the traditional oil cartels will have less influence as new energy sources emerge in the industry now and then. Dr. Raghunath Mashelkar, PIC President also emphasised reducing India’s fuel import bill and advancing renewable energy initiatives in his closing remarks.

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