Petrol, Diesel & LPG to Come Under GST? | Here’s How GST Would Affect Fuel Prices

The Central government might bring the petroleum products such as Petrol, Diesel, and LPG under the Goods and Services Tax. The government is waiting for an agreement from the states to bring the petroleum products under the GST. Finance minister Arun Jaitley said on Tuesday that the central government supports the idea of bringing the petroleum products under the Goods and Services Tax. They are only waiting for making a consensus with the states.

Centre to levy GST on Petrol, Diesel & LPG after Agreement with States

The prices of petroleum products like petrol, diesel and LPG products are high and not in line with the global prices as a lot of duties are imposed on such products by the states. This is also the reason for different prices of petrol and diesel in different states. The petroleum products are a part of the GST legislation but they can be brought under the ambit of GST only after 75 percent of the states agree to the same. The central government hopes that states would agree to the idea of bringing the petroleum products under GST.

The UPA government did not include petroleum products under the GST because it knew that states would not agree to it. The Finance minister told that due to the rising crude oil prices, the central government had decided to reduce the duties it imposed on Petroleum products. The Central government had directed the states to do the same in order to bring down the prices of petrol, l, diesel and LPG. The states ruled by NDA government agreed but the states ruled by UPA government denied.

How would GST Affect Petrol and Diesel Prices?

With the implementation of Goods and Services Tax across the country, only the petroleum products and liquor were out of the ambit of GST. For states, only the petroleum and liquor were their independent sources of taxes. The GST on all other products would go directly to the central government, which would then provide the states with their share of taxes. A large part of the taxes on petroleum products is covered by the taxes imposed by the states. 

This cannot be said that imposing the GST on products like petrol, diesel and LPG would bring down the prices. The prices of petrol, diesel and LPG depends on the taxes as well as on the crude oil price in the international market.



Asma Hafiz

Asma is a passionate Writer, Blogger, and Columnist. She writes about automobiles, education, entertainment, technology, spirituality, and exciting events. Being a marketing graduate and content marketer she makes the best use of her knowledge and skills to express ideas in her writings. You can reach Asma at
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