ISLAMABAD: The federal government on Tuesday decided not to decrease the prices of petroleum products for the next fortnight and increased the rate of petroleum levy (PL) on ex-depot sale of petrol and High Speed
Diesel (HSD) by Rs4 per litre.
The government raised PL on petrol by Rs4 per litre and Rs2.34 per litre general sale tax (GST) besides slashing the ex-refinery or cost of Pakistan State Oil (PSO) supply by Rs6.69 per litre- from Rs125.27 to Rs118.58 per litre. Petroleum levy on petrol has been raised to Rs13.62 per litre, which was Rs9.62 in second half of November.
The GST rate has further revised from zero in second half of November to Rs2.34 per litre with effect from December 1.
The Oil Marketing Companies (OMCs) margin and Dealers Commission remained Rs2.97 per litre and Rs3.91 per litre on petrol.
On November 25, OMCs and dealers called off a countrywide strike after assurance from the federal government that they would revise their margins.
The PL rate of HSD also raised by Rs4 per litre from Rs9.14 per litre to Rs13.14 per litre.
The PL rate on kerosene oil (SKO) also increase by Rs2.00 per litre from Rs3.91 per litre to Rs5.91 per litre.
The GST rate, however reduced to Rs20.83 per litre from Rs21.65 per litre. PL on Light Diesel Oil (LDO) is Rs3.66 per litre.
The GST rate also revised upward. The government has raised GST on petrol from zero to 1.43 percent, on HSD increased from 7.20 percent to 7.37 percent, however GST rates on SKO is 8.19 percent and LDO 0.46 percent at the same level of November 16.
The government did not drop POL prices in line with global prices. Rather it used the opportunity to gradually increase PL which will help control primary fiscal deficit. People were expecting that the government may reduce the prices of petroleum products from December 1, 2021 for the next fortnight, as the international oil prices registered a decline.
Adviser to the Prime Minister on Finance Shaukat Tarin had also stated that petrol would become more expensive, as the Pakistani rupee continues to depreciate, compared with the dollar. Petroleum levy will have to be increased by Rs4 per litre every month, Shaukat Tarin had already announced.
A spokesperson for the Ministry of Finance, Muzzammil Aslam, in a tweet had said, “Allah has been kind to Pakistan, as the global oil prices have come down. Brent prices came down to $72.91/bbl.”
“The full impact of this decline will be realised on December 15 pricing. But definitely, it will be a big relief on imports. Don’t forget, the government is suffering a loss of Rs50/litre in taxes.”
Copyright Business Recorder, 2021