ISLAMABAD: The government has announced to increase the prices of petroleum products by Rs 35 (petrol, diesel) and Rs 18 per litre (kerosene oil, light diesel) with decision to immediately implement the increase few minutes after their announcement by Finance Minister Ishaq Dar.
Finance Minister in a press statement issued through state-owned news channel stated that devaluation of rupee and 11 percent increase in petroleum prices in the international market were taken into consideration to increase the prices of petroleum products. Dar said it was decided to increase the price of petrol and diesel by Rs 35 and the price of kerosene oil and light diesel oil by Rs 18 per litre.
Dar stated that the after the increase in petroleum prices, the price of petrol is Rs 249.80, High speed diesel Rs 262,80, Kerosene oil Rs 189.83 and light diesel oil Rs 187 per litre. He said that immediate action taken on the recommendation of the Oil and Gas Regulatory Authority (Ogra) would help counter the artificial shortage of petroleum prices reported in some part of the country. He said there were reports of artificial shortage in some areas; therefore, Ogra recommended that prices to be immediately implemented.
POL products: additional Rs76bn revenue can be generated thru PL maximization to Rs50 per litre
He said that last week, the value of Pakistani rupee has decreased significantly, but the government has not increased the price of petrol from October to January 29 instead the prices were reduced.
Sources in the finance ministry said that the government has increased petroleum levy on high speed diesel from Rs 35 on per litre to Rs 40 whereas PL on kerosene was decreased to Rs 0.32 per litre from Rs 6.22 per litre and light diesel oil were reduced to Rs27.25 from Rs30.45.
Federal government decided to increase the petroleum levy (PL) on HSD by Rs 5 per litre to meet a monthly target of Rs 32 billion.
The PL rate on kerosene oil and light diesel oil whose consumption was increased significantly in the winter have been reduced by Rs 5.9 per litre and fixed at 32 paisa and LDO Rs 30.45 to Rs 27.25 per litre or Rs 3.2 per litre.
Sources in Petroleum Division said that based at the consumption in last six month, the government is expecting to generate through PL, Rs 160-170 billion in next five months (end of June 2023). The raise in ex-depot price will further reduce the sale/ consumption of petroleum products. Oil Companies Advisory Council (OCAC)’s data shows that the sale of petroleum products in last six months of financial year 2022-23 compared with corresponding year HSD imports was down by 38 percent to 1.285 million tons and petrol imports down by 27 percent to 2.624 million tons.
When contacted a senior FBR official told Business Recorder that the sales tax has not been imposed on petroleum products. Sales tax rates remained zero percent on POL items. In this regard, Revenue Division has moved a summary to Finance Minister Ishaq Dar for imposing a lower rate of sales tax on all petroleum products, but the FBR’s proposal was rejected by the Finance Minister. Therefore, the FBR has not issued any notification. The FBR wanted to gradually raise the sales tax rate of petroleum products, the official added.
Copyright Business Recorder, 2023
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