Fuel prices may reduce in 2-3 months: Pralhad Joshi

Dharwad MP and Chairman of Parliamentary Standing Committee on Petroleum and Natural Gases Pralhad Joshi said that fuel prices may come down in the next two-three months after five ethanol plants installed by the oil ministry starts producing biofuel and are blended with normal fossil fuel.

Speaking to the media in Hubballi on Saturday, Joshi said once the blending of biofuel is undertaken, the prices of fuel will come down to Rs 60- Rs 65 per litre.

The petroleum department is setting five ethanol plants in India and the production of ethanol using sugarcane, wheat, paddy and other crops are expected to commence in next three months and with the introduction of biofuel, the prices of fossil fuel will surely come down.

Joshi said the Union government has approved to blend 20% biofuel in normal fuel. He blamed the previous UPA government for low production of bio-fuel in India.

“Though the UPA government had set itself to blend 10% of bio-fuel with normal motor fuel, it could not even achieve 5% of it,” Joshi said and claimed that the Narendra Modi government will ensure that blending of 20% of bio-fuel will be completed.

No cut in excise taxes

Joshi also clarified that the Union government will not cut excise taxes on petroleum products. He said the Centre is levying Rs 19 as a tax on a litre of petroleum product out of which Rs 5 is directly given to the National Highway Authority of India for construction of roads.

At the same time, Joshi said the state governments can cut 2-3% of the local taxes it levies on petroleum products.

Another Rs 5 is given to the state governments under the Central Road Funds. The Union government is left with only 7-9% and is not in a position to lower its tax collection, else the country will fall in a debt track which it had during the Manmohan Singh era.

“The Modi government has cleared Rs 1.40 lakh crore of oil bonds, which the previous government had issued. The interest of that oil bonds itself was Rs 70,000 crore which the NDA government cleared,” he said.

Joshi also conceded that India was under the pressure of the US government’s sanctions against Iran, from where India was getting cheaper fuel. Low production of fuel from the oil-rich countries and falling value of the rupee are other factors for the hike in fuel prices, Joshi added.