The Centre will soon write to the states to bring uniformity in the Value Added Tax (VAT) on oil products so that benefits of price cuts filter down to the masses, Union Petroleum and Natural Gas Minister Dharmendra Pradhan said.
"We have cut down the prices of petrol and diesel by around Rs 5 to Rs 5.50 since Narendra Modi became the Prime Minister. It has a straight impact on inflation, but whether the benefits filter down to the public or not depends on the taxes imposed on petroleum products by the state governments," Pradhan told reporters.
"I am going to write to all Chief Ministers to bring uniformity in VAT on petroleum products and keep it under a bandwidth so that benefits of price cuts go down to the public," he said.
The Union Minister was in the state to attend the second death anniversary of veteran BJP leader Kailashpati Mishra.
Pradhan, who is a Rajya Sabha member from Bihar, said states impose varied taxes on petroleum products to shore up their revenues and it depends on their market wisdom to decide whether they keep taxes lower and sell more, or let the prices remain high and sell less.
Subsidy on Liquefied Petroleum Gas (LPG) would stay and it would be transferred to bank accounts of consumers throughout the country from January 1, 2015, he said.
"Right now a subsidy of Rs 426 is being given on cooking gas cylinders. We are launching the scheme of transferring it directly to the bank accounts of consumers in 54 districts of the country from November 15. The system will be made operational across the country from January 1 next year," he said.
Pradhan said Saudi Arabia, which supplies 20 per cent of crude oil imports of India, wants to invest in the petroleum sector in the country.
"I visited Saudi Arabia recently and witnessed positive sentiments about India. It earlier used to provide only oil to us, but now it is strongly requesting to go beyond buyer-seller relations and invest in our country," he said.
The leading oil producing West Asian country would be opening a business development office in India in the coming days, an outcome of the Prime Minister's efforts to check the economic slowdown, as well as, remove indecisiveness in decision making, the Union Minister said.
"I have also told Saudi Arabia that there is no need to hold minister-level consultations at a gap of two years. We will now hold the next consultation in early 2015," he said.
Pradhan said the Centre has fixed the new gas price in the country at 5.6 dollars per MMBTU (Million Metric British Thermal Units).
"Gas price was earlier 4.2 dollar per MMBTU. The UPA government tried to increase it to 9.45 dollar, but we fixed it at 5.6 per MMBTU. We took this decision because gas prices have direct impact on the prices of fertilisers," he said.
The Union Minister said ONGC Videsh Limited was doing exceedingly well and doing good business.
As the in-charge of Jharkhand Assembly elections, Pradhan said BJP would get a majority and poll preparations in the state were going on smoothly.
