FOSSIL FUEL AND RENEWABLE ENERGY WOKSHOP May 2014
Taxes on fossil fuel Excise duty: revenue raising MID Levy: to finance environmental programmes, especially MID
Evolution of rates Excise duty Rs 2 bn ( around US $ 66 m) PeriodMogas (gasoline) Diesel Before Sept %75% Sept 2000 to June %25% Jul 2002 to Oct 2010Rs 9.80 per litre Rs 3 per litre Nov 2010 to dateRs per litre Rs 3.30 per litre Consumption local million litre 250 million litres
Evolution of rates MID levy introduced in June 2008 June 2008 – Oct 2010 Nov 2010 to now Mogas/diesel /fuel oil /aviation spirit (per litre) 15 cts30 cts Coal kg15 cts30 cts LPG kg15 cts30 cts
MID LEVY MID levy is imposed on domestic consumption as well as re-export (bunkering) Issue: Aviation spirit: MID levy is in contraction of the International Civil Aviation Organisation Principle of Taxation: Commitment to remove it next year Bunkering : making our project less competitive.
IS MID LEVY A CARBON TAX? Source PARRY, IMF 2011
LPG Mainly used by household for cooking – 12 kg cylinder subsidised price Rs 330 – subsidy around Rs 300 (i.e around $ 10, 50% of the price – Gas used for industrial use – not subsidised-
Ethanol Govt planning to mix ethanol with petrol E5