Cess for clean fuel likely in the budget

To check growing vehicular emissions, the government may impose a cess on diesel and petrol in the coming budget to leapfrog India’s transition into cleaner fossil fuels.

Updated on: Jun 17, 2014, 01:10:07 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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To check growing vehicular emissions, the government may impose a cess on diesel and petrol in the coming budget to leapfrog India’s transition into cleaner fossil fuels.

The government is looking at expanding Bharat Stage IV emission norms across India by 2017 — made mandatory in 13 major cities in 2010 — and Bharat Stage V norms by 2020 — reducing per vehicle emission burden by half.

The shift would cost about Rs. 80,000 crore (Rs. 800 billion) —about one-fifth of the Centre’s annual plan expenditure — and the government is not willing to bear extra financial burden considering fiscal constraints because of slowly growing economy.

It wants the consumers to pay for reducing toxic emission from vehicles by way of cess to be imposed on every litre of the fuel sold. An expert committee on Auto Fuel Vision and Policy 2025 this May recommended a cess of 75 paisa per litre for bearing the cost of technology upgrade in refineries to implement the proposed roadmap for transition.

Another step recommended was to bridge the cost differential between Bharat Stage-III and Bharat Stage IV fuels so that consumers opt for the cleaner fuel. Penetration of Bharat Stage IV petrol was 24% and diesel just 16% in 2013. “The amount collected as high sulphur cess will rapidly decline as the three-phase rollout to complete BS IV standards will be completed by 2017,” the committee headed by Saumitra Chaudhari said.

The two cess put would generate Rs. 74,000 crore (Rs. 740 billion) by 2021 and would help the oil companies to invest faster in technology upgrade. Without the cess, the committee said, changeover to Bharat Stage IV will not happen before 2025.

The committee had recommended to reduce sulphur content from 350 particles per million (ppm) to 50 ppm by 2017 and 10 ppm by 2020.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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