In a surprise move, the caretaker government has announced a considerable increase in the prices of petroleum products for the month of July. The price of petrol has been increased by Rs 7.54 per litre, climbing to Rs 99.50, and that of High Speed Diesel (HSD) by Rs 14 per litre increasing the price to Rs 119.31 per litre. Kerosene by Rs 3.36 per litre, climbing to Rs 87.70, read a statement issued by the Finance Division. Moreover, the price of Light Diesel Oil (LDO) has been jacked up by Rs 5.92 to reach Rs 80.91.
The newly announced prices will be effective from July 1 to the midnight on July 31, 2018. On the recommendations of Ogra, Ministry of Finance has approved the new prices of petroleum products with effect from July 1.
"The increase in the petroleum prices is caused due to increase in petroleum prices in international market and depreciation of rupee against US dollar," Ministry of Finance stated.
The caretaker government stated that due to tight fiscal position, the government decided to pass on the full impact of the increase to the consumers. The financial impact of above dispensation will be implemented through revision of sale tax rates and petroleum development levy.
Ministry of Finance has followed the recommendations of Ogra which had proposed increase in the price of petrol by Rs 7.54 per litre, HSD by Rs 14 per litre, SKo by Rs 3.36 per litre and LDO by Rs 5.92 per litre. Usually, the government announces the new oil prices on the last day of every outgoing month which is applicable from the midnight of the new month.
Earlier, there were reports that the caretaker government had decided not to change the prices of petroleum products for the time being in cabinet meeting held on Saturday. A senior government official said the caretaker ministers did not support a price increase.
The Federal Board of Revenue (FBR) has increased sales tax on Motor Spirit from 12 percent to 17 percent. Sales tax on High Speed diesel oil has been increased from 24 percent to 31 percent. Sales tax on Kerosene has been increased from 12 percent to 17 percent and sales tax on Light diesel oil has been increased from 9 percent to 17 percent.
Following is the text of the SRO issued by the FBR late Saturday night: SRO.830(I)/2018. In exercise of the powers conferred by clause (b) of sub-section (2) and sub-section (6) of section 3 of the Sales Tax Act, 1990, the Board with the approval of Federal Minister-in-charge, is pleased to direct that the following further amendment shall be made from the 1st July, 2018, in its Notification No.SRO.57(I)/2016, dated the 29th January, 2016, namely.
In the aforesaid Notification, for the existing Table, the following shall be substituted, namely:
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S.No. Description PCT Heading Rate
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(1) (2) (3) (4)
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1. Motor spirit excluding HOBC 2710.1210 17.0% ad valorem
2. High speed diesel oil 2710.1931 31.0% ad valorem
3. Kerosene 2710.1911 17.0% ad valorem
4. Light diesel oil 2710.1921 17.0% ad valorem
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