Oil regulator to petition UP for lower taxes

Updated: Jul 04, 2011, 09:54 AM IST

Pawan Kumar & Pankaj Sharma/ZRG

Enthused by the response from the Haryana government to its recent pitch for reduction in taxes levied by the state government on natural gas, the Petroleum and Natural Gas Regulatory Board (PNRGB) would now engage the Uttar Pradesh government, which levies among the highest local taxes on Piped Natural Gas (PNG) and Compressed Natural Gas (CNG).

“We are planning to meet Chief Minister Mayawati soon to discuss the high prices of natural gas in the state due to their taxation structure. We hope the UP government will consider this issue for the betterment of consumers in the state,” said PNGRB chairman L Mansingh in an exclusive interview.

The petroleum regulator said the Haryana government had recently acceded to its request for rationalization of taxation structure in the state reducing it by two per cent. Mansingh recalled that the PNGRB had repeatedly advocated states to rationalize the tax on natural gas.

“Our repeated pitch to various state governments is that if they reduce taxes, the gas consumption would only increase. They (states) would not be the loser in terms of revenue. In fact reduction in taxes would increase their revenues,” he argued.

He claimed the natural gas under lower tax slab would help consumers as well as the states. He said, “It will allow the level of pollution to come down. However, if gas distribution through pipelines gets stuck due to high taxation, government’s international commitments on inducting environment friendly energy fuels would be difficult to meet.”
Mansingh said the key task for the regulator was to improve the gas density in the country.

“We want to expand the gas infrastructure in country because without this there cannot be any gas market. We also want a competitive gas market in this country,” he added.

Out of 28 states in the country only eight states have so far taken initiative for city gas distribution. The petroleum regulator has identified 300 cities in the first phase for supply of city gas and ultimately plans to pipe the whole country.

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