‘Make attractive fuel option’: Govt panel favours scrapping excise duty on CNG
A government panel supported by the Petroleum and Natural Gas Regulatory Board recommended removing excise duty on CNG and reducing GST on vehicles to boost adoption, supporting India’s goal of increasing natural gas share to 15% by 2030
New Delhi: A high-level government committee, supported by the Petroleum and Natural Gas Regulatory Board (PNGRB), has recommended removing excise duty on Compressed Natural Gas (CNG) to lower prices and promote consumption of the green fuel to meet India’s target of achieving a 15 per cent share of natural gas in the fuel mix by 2030.
The key recommendations include removing the 14 per cent excise duty to make CNG a more attractive fuel option and also lowering GST on CNG vehicles to 5 per cent to bring them on par with electric vehicles to accelerate adoption.
The recommendations favour maintaining a competitive price difference between CNG and petrol so that consumers are encouraged to switch to the green fuel. The tax relief on natural gas is anticipated to impact roughly 1.9 crore households and 38.41 lakh potential users. These proposals aim to address the currently high taxes, such as the 14 per cent excise duty and state VAT, which have made CNG less competitive in certain regions, particularly in the southern states.
Meanwhile, the government has also been encouraging households to switch to piped natural gas (PNG) from LPG as the West Asia crisis has disrupted supply chains. The expansion of piped natural gas (PNG) has gained momentum, with about 4.58 lakh new PNG connections being gasified and about 5.1 lakh additional customers registering for new connections since March this year.
Till April 15, about 35,000 PNG consumers have surrendered their LPG connections via MYPNGD.in website. States have been advised to facilitate new PNG connections for domestic and commercial consumers. The government is encouraging natural gas adoption through synergy between the PNGRB and states as part of India’s transition toward a cleaner and more sustainable energy future.
As part of the strategy to increase the share of natural gas in the country’s energy mix, the expansion of the City Gas Distribution (CGD) network through Piped Natural Gas (PNG) connections has emerged as one of the key performing areas.
Spearheaded by entities authorised by the PNGRB, the CGD network now spans 307 geographical areas (GAs), covering nearly 100 per cent of the country’s geographical area except islands, touching around 784 districts across 34 states and Union Territories.
The government has undertaken a series of policy and regulatory measures to catalyse growth in this sector. These measures range from allocating administered price domestic gas and easing supply mechanisms to mandating PNG provisions in government and defence residential complexes, granting Public Utility status to CGD projects, and directing the CPWD and the NBCC to include PNG provisions in all government residential complexes.
