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CNG-PNG Price Cut Likely: The Central Government has approved the recommendations of the Kirit Parekh Committee on gas prices. Prime Minister Narendra Modi In the cabinet meeting chaired by the cabinet, the government has approved the new formula for fixing the price of domestic natural gas. It is believed that after this decision of the government, the prices of fuels like CNG and PNG may come down. The government reviews domestic natural gas prices twice a year. But there was no change in the prices of gas on 1 April 2023 as the government had to take a decision on the recommendations of the Parikh Committee.
The Kirit Parikh Committee has recommended the central government to reduce the excise duty on CNG. In its recommendations, the committee has told the government that until a decision is taken to bring natural gas under the purview of GST, the government should charge less excise duty on CNG.
Natural gas is currently out of GST. At the same time, from Central Excise Duty to VAT is charged on petroleum products. The central government does not levy excise duty on natural gas. But 14 percent excise duty is charged on CNG, then the state government imposes VAT up to 24.5 percent. The Kirit Parikh Committee has recommended the government to bring natural gas under the ambit of GST. The committee assumed that its states would agree. In such a situation, to implement this, the Center should compensate the states for any loss for 5 years.
When GST came into force on July 1, 2017, petrol diesel, ATF were kept out of GST. The Kirit Parikh Committee believes that until the gas is brought under the ambit of GST, the government should reduce the excise duty on CNG so that the consumers can get relief.
The Kirit Parikh Committee has also suggested removal of cap on gas price for the next 3 years. Along with this, the committee has recommended fixing the price band of natural gas produced from old gas fields in the country at $ 4 to 6.5 per unit (mmBtu).
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