The Ministry of Petroleum and Natural Gas has given State Governments time till July 31 to send replies as it seeks to conclude discussions on State Specific Costs scheme.

A meeting with State Finance Ministers could be held in the first week of August, a senior official of the Ministry said on Monday.

State levies

State specific levies add up to ₹7 a litre in the price of diesel, while it increases retail prices of domestic LPG by up to ₹4.14 per cylinder.

The Ministry will urge the States with high levels of taxes and levies like octroi and entry tax, to cut these duties and bring down prices.

At the beginning of the month, the Ministry had deferred a hike due to State Specific Costs on the retail selling price of domestic LPG and public distribution system (PDS) kerosene.

The Ministry had stated then that the hike would be deferred till discussions with State Governments are completed.

The State Specific Costs scheme was introduced in July 2012 by the UPA Government which sought to recover levies from the consumers of States and municipal areas levying local taxes.

This had led to an increase in domestic LPG and PDS kerosene prices in some States and a reduction in prices in others.

The revisions would have entailed an increase in domestic LPG of ₹4.14 per cylinder in Kerala, ₹3.17 in Karnataka, ₹0.50 in Haryana, ₹5.16 in Madhya Pradesh and ₹0.91 in Uttar Pradesh. Such hikes had been deferred by the Oil Ministry earlier in July.

However, there would also be a reduction in some States. In Assam, retail prices of domestic LPG would have come down by ₹9.41 per cylinder, ₹1.26 in Bihar and ₹2.97 in Maharashtra. The price cuts would remain till the end of discussions with the States.

Customers buy LPG cylinders at non-subsidised or retail rates only after the subsidised quota is utilised.

In Delhi, subsidised domestic LPG cylinders are sold at ₹414 per cylinder.

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