The Ministry of Petroleum has decided on levying a petroleum levy at the rate of Rs 5/kilogram on CNG. The edge it had over other competing fuels for the last couple of years will be over now.
This decision comes a week after the govt increased the price of CNG by Rs 6 per kilogram to Rs 66/kg. The imposition of this levy according to sources will generate about 12 billion rupees additional revenues for the low tax to GDP ratio of 8.6% only while in India it is abou 19% and US at 25% . The sources say the decision has been made to reduce the profit of CNG owners which is quite true but it will hurt them very badly as the difference between petrol and CNG has narrowed and this hurt sales.
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