Locally produced LPG: PLPGMA urges government to end 'discriminatory' taxes, PL

LAHORE: Pakistan LPG Marketers Association (PLPGMA) has appealed to the Federal Government to end the discriminatory taxes and petroleum levy (PL) on LPG produced in Pakistan.

"Domestically Produced LPG is subject to 17% GST and Petroleum Levy of Rs. 4,669 per Metric Ton, whereas Imported LPG is subject to only 10% GST and is exempt from Petroleum Levy/Regulatory Duty" said Farooq Iftikhar, Chairman of PLPGMA. "LPG is a poor man's fuel and is used by people living in rural and far flung areas of Pakistan that do not have access to Sui Gas. It is used by people with meagre incomes who want to cook with a clean fuel and not use wood or biomass" he said.

Approximately 70% of Pakistan's LPG requirements is met through indigenous LPG production from Refineries and Gas Fields whereas the remaining 30% is imported. The price for Indigenous Production is indexed to the highest international price benchmark of Saudi Aramco Contract Price, whereas most of the LPG imported into Pakistan is available at a discount to Saudi Aramco CP. By reducing the GST on imports and waiving off the Regulatory Duty, the Federal Government has provided an indirect subsidy of over Rs. 6 Billion on imported product, thus depriving the National Exchequer of revenue that should have been earned.

LPG Producing Fields have been forced to shut down their operations and curtail production on several occasions as they have been unable to compete with cheaper imports.

Copyright Business Recorder, 2020