A day after increasing tax and cess on sale of petrol and diesel, Gujarat Government on Wednesday announced to reduce both the taxes in natural gas prices for the small and medium industries.
The State Energy Minister Saurabh Patel has announced the reduction in piped natural gas for SMEs by Rs 5 per cubic meters for SMEs across the State. He claimed that this relief would be rolled out in a phased manner. “This (reduction) will result into the direct benefit to the tune of Rs 625 crore per annum for the small industries in the State,” Patel said.
The State Government had increased the tax rate and cess on petrol and diesel on Tuesday to what it called “off-set” fall in Government revenues due to fall in global crude oil prices, raising prices of basic transport fuel for the citizens.
The State is expected to earn about Rs 1,500 crore per annum due to higher tax and cess on petrol and diesel. However, the very next day it has today announced reduction in natural gas prices, extending benefit of Rs 625 crore for the industry. The State Government has been able to reduce the prices of natural gas as its procurement prices have come down substantially due to fall in international gas prices. Gujarat imports major part of its natural gas needs as liquefied natural gas from abroad. The prices of lNG that were ruling in double digits globally have now fallen to less than half due to lower global demand and relatively warmer winter.
The State estimates that this reduction would end up benefiting about 2,800 SMEs across the State.