ISLAMABAD: The government has projected to collect Rs 76 billion additional revenue if it maximizes the petroleum levy to Rs 50 per litre on all petroleum products in the remaining five months (February-June) based on current fuel consumption and international oil prices.
This was revealed to Business Recorder by well-placed sources in the Petroleum Division.
Petroleum levy on petrol is already maxed out at Rs 50 per litre since November 2022. However, the estimated revenue impact, if the current rate of Rs 35 PL on high speed diesel (HSD) is raised by Rs 15 to Rs 50 the government would generate Rs 15 billion each month or Rs 75 billion till the end of the current fiscal year.
Raising PL on the other two petroleum products - kerosene oil (SKO) and Light Speed Diesel (LDO) would generate an estimated revenue of Rs 1 billion (Feb-June 2022-23), as consumption of these two items in total petroleum products is not more than 0.4 percent. Currently, Rs 6.22 per litre PL is being charged on SKO and Rs 30.45 per litre on LDO.
Sources maintained that the government is anticipating little change in consumption of petroleum products for the next five months premised on the trend observed duringthe first six months of the current financial year.
On Tuesday, Oil Companies Advisory Council (OCAC) released comparative data of sale of petroleum products July-December 2021 and 2022: petrol imports were down by 27 percent to 2.624 million tons and HSD imports declined by 38 percent to 1.285 million tons.
It has been projected that Brent crude would average $ 89.37 a barrel in 2023(currently at $ 88.15 per barrel). Pakistan relies on importing 60 percent HSD and 80 percent petrol to meet domestic consumption. Petroleum levy generated Rs 230 billion in the first half of the fiscal year, an official of Petroleum Division told Business Recorder on condition of anonymity – a mere 30 percent of the total budgeted PL target of Rs 750 billion for the current financial year.
“The final figure of actual PL on POL products collection in the first half of financial year will be released in the current month,” the official added.
The government under the contingency revenue measures agreed with the International Monetary Fund (IMF) to impose sales tax on petroleum products (up to the standard rate of 17 percent) if a month’s revenue collection data underperformed.
Copyright Business Recorder, 2023