ISLAMABAD: The government has no plan to increase the general sales tax (GST) on petroleum products, however petroleum levy (PL) would be gradually increased from the present Rs37.42 per litre to Rs50 till April 2023.
This was revealed by Petroleum Secretary Ali Raza Bhutta before a parliamentary panel on Friday.
Senate Standing Committee on Petroleum met under chairman Muhammad Abdul Qadir to discuss the proposed deregulation of petroleum products.
The committee also discussed 360 mmcfd gas shortfall in the Sui Southern Gas Company (SSGC) and gas loadshedding in the coming winter.
The committee has been apprised that the government is charging Rs16 at the rate of 10 percent custom duty on refined petrol and Rs22.21 per liter on high-speed diesel (HSD) and also charging PL on the products, however, zero GST is charged.
The chairman committee remarked that the government would not meet its budgeted revenue collection of Rs300 billion through GST.
Masroor Khan, chairman Oil and Gas Regulatory Authority (Ogra) responded to the apprehensions shown by members Committee.
Most of the committee members opposed the government’s move to deregulate the products in a hurry without proper legislation.
They expressed their fear that it would create cartelisation without a strong regulator.
The OGRA chairman said that the price mechanism of petroleum products based at Pakistan State Oil (PSO)’s cost of supply. He said that 87 percent of price component was based at Platts average price and 13 percent incidental including premium on petroleum products.
The petroleum secretary further explained that the process of deregulation would be completed in phases and PSO with 55 percent market share would be used as a tool to discourage overcharging by oil marketing companies (OMCs).
Copyright Business Recorder, 2022