AVN 67.30 Increased By ▲ 0.65 (0.98%)
BOP 9.82 Increased By ▲ 0.07 (0.72%)
CHCC 128.31 Decreased By ▼ -1.64 (-1.26%)
DCL 11.26 Increased By ▲ 0.06 (0.54%)
DGKC 111.92 Decreased By ▼ -0.93 (-0.82%)
EFERT 61.68 Increased By ▲ 0.93 (1.53%)
EPCL 44.78 Increased By ▲ 1.03 (2.35%)
FCCL 21.12 Increased By ▲ 0.07 (0.33%)
FFL 17.77 Increased By ▲ 0.32 (1.83%)
HASCOL 21.87 Increased By ▲ 0.91 (4.34%)
HBL 133.11 Increased By ▲ 1.36 (1.03%)
HUBC 82.00 Increased By ▲ 1.78 (2.22%)
HUMNL 8.10 Decreased By ▼ -0.01 (-0.12%)
JSCL 29.90 Decreased By ▼ -0.81 (-2.64%)
KAPCO 27.88 Increased By ▲ 1.39 (5.25%)
KEL 4.21 Increased By ▲ 0.05 (1.2%)
LOTCHEM 12.67 Increased By ▲ 0.17 (1.36%)
MLCF 39.49 Decreased By ▼ -0.17 (-0.43%)
OGDC 105.49 Increased By ▲ 1.16 (1.11%)
PAEL 37.30 Increased By ▲ 0.35 (0.95%)
PIBTL 13.58 Increased By ▲ 0.33 (2.49%)
PIOC 97.80 Decreased By ▼ -0.70 (-0.71%)
POWER 9.52 Increased By ▲ 0.14 (1.49%)
PPL 93.69 Increased By ▲ 0.58 (0.62%)
PSO 207.25 Increased By ▲ 5.75 (2.85%)
SNGP 64.41 Increased By ▲ 0.60 (0.94%)
STPL 14.17 Increased By ▲ 0.27 (1.94%)
TRG 55.33 Increased By ▲ 0.73 (1.34%)
UNITY 18.39 Increased By ▲ 0.29 (1.6%)
WTL 1.20 Increased By ▲ 0.01 (0.84%)
BR100 4,364 Increased By ▲ 18.37 (0.42%)
BR30 22,237 Increased By ▲ 153.73 (0.7%)
KSE100 41,997 Increased By ▲ 190.48 (0.46%)
KSE30 17,703 Increased By ▲ 44.7 (0.25%)
COVID-19 TOTAL DAILY
CASES 309,015 798
DEATHS 6,444 7

ISLAMABAD: The Federal Board of Revenue (FBR) has estimated additional revenue of Rs 3-4 billion in August 2020 as a result of increase in the price of petroleum products by up to 11.8 percent. A senior FBR official told Business Recorder here on Tuesday that the federal government has raised the ex-refinery price of all petroleum products across the board to generate additional revenue under general sales tax (GST) which has been maintained at the standard rate of 17 percent for the month of August. Sales tax is levied as a percentage of the price, ie, on ad valorem basis, therefore any raise in price would raise total sales tax collection.

The government has reduced the Petroleum Levy (PL) on petrol to Rs 26.70 per litre, and PL on high speed diesel oil (HSD) has been fixed at Rs 25.73 per litre. The petroleum levy on superior kerosene oil (SKO) has been fixed at Rs 6 per litre and Rs 3 per litre on light diesel oil (LDO).

On Friday, Finance Division announced an increase in petroleum prices by up to 11.8 percent by keeping the GST at the standard rate. The ex-refinery prices of POL products have been increased, a major demand of Oil Marketing Companies (OMCs) and local refineries. However, PL on petrol and HSD have been reduced to minimize the impact of increasing global petrol prices.

Sources said that based on monthly consumption of petrol and HSD estimated Rs 3-4 billion additional revenue will be generated under GST head. These two products are major sources of GST and PL. The average petrol sales are touching 700,000 tonnes per month against monthly consumption of around 600,000 tonnes of HSD. The sales of SKO and LDO are on average around 11,000 and 2,000 tonnes per month.

The GST on petrol collection would rise by 56 paisa per litre and 70 paisa on HSD for current month. In August the rate of GST on petrol is Rs 15.11 per litre which was Rs 14.55 per litre in June 26 to July 31, 2020. The rate of PL on petrol has also been revised downward by Rs 3.30 per litre from Rs 30 per litre to Rs 26.70 per litre. The rate of GST on HSD is 17 percent. The ex-refinery price of HSD has been calculated at Rs 58.36 per litre in August which was Rs 49.28 per litre in (June 26-July 31). An increase of Rs 9.08 per litre has been allowed in August. The PL on HSD has been reduced by Rs 4.27 per litre from Rs 30 to Rs 25.73 per litre.

The GST on SKO has been set at Rs 9.49 per litre which was Rs 8.62 per litre in June 26-July 31. Additional revenue of 87 paisa per litre will be collected under GST. The PL rate is kept at Rs 6 per litre. The ex refinery price has increased by Rs 4.91 per litre to Rs 53.60 per litre in August which was Rs 48.69 per litre in June-July.

The revenue collected from petroleum levy is not part of the federal divisible pool, whereas sales tax as per the constitution is a component of the divisible pool and distributed as per the seventh National Finance Commission formula: 57.5 percent provinces with 46.5 percent for the centre. Therefore, the share of provinces would subsequently increase following raise in petroleum prices.

The price of petrol has been increased by Rs 3.86 per litre and HSD by Rs 5.00 per litre. Whereas, the prices of SKO has increased by Rs 5.97 per litre and LDO by Rs 6.62 per litre with effect from August 1.

As per calculations, the ex-depot price of petrol is raised to Rs103.97 per litre instead of Rs100.11 per litre, showing an increase of Rs 3.86 or 3.8 percent. The product is mostly used in private transport, small vehicles. The ex-depot price of HSD is fixed at Rs 106.46 per litre from its existing rate of Rs101.46 per litre, up by Rs 5.00 per litre or 4.9percent. The HSD is mostly used in heavy transport vehicles and agricultural sector.

The ex-depot price of SKO is at Rs65.29 instead of Rs59.32 per litre at present, an increase of Rs 5.97 per litre or 10 percent. The ex-depot price of LDO in now Rs62.86 per litre instead of Rs56.24 per litre at present, showing an increase of Rs6.62 per litre or about 11.8 percent. LDO is mostly used in flour mills and power plants.

The Oil and Gas Regulatory Authority (Ogra) worked out an increase of about Rs7 per litre in petrol and Rs 9.50 per litre in HSD for August and Rs6 per litre increase in SKO and LDO prices based on existing tax rates and import costs of the Pakistan State Oil (PSO).

The government had increased its reliance on the PL to fetch additional Rs 234 billion revenue in the budget 2020-21. The overall collection of PL has gone up to Rs 450 billion against revised estimates of Rs216 billion in financial year 2019-20.

Copyright Business Recorder, 2020