October 9, 2002	Wednesday	Sha’aban 2, 1423

KARACHI, Oct 8: The government has taken a hit on revenue collection for the second time in less than one month by reducing the petroleum development levy (PDL) to mitigate the impact of increase in international oil prices on consumers.

The national kitty will suffer a revenue loss of Rs678.6 million per month in terms of two downward adjustments in PDL on petrol, diesel and kerosene.

On October 1, the government has cut the PDL on petrol by 21 paisa per litre followed by 44 paisa on diesel and 53 paisa on kerosene. On petrol, the PDL has been slashed to Rs11.62 per litre from Rs11.83 per litre. The rate of levy on HSD has been curtailed to Rs2.05 per litre from Rs2.49 per litre. On kerosene, PDL has been brought down to Rs1.30 per litre from Rs1.83 per litre.

The PDL on petrol was slashed by 16 paisa per litre followed by cut of 66 paisa per litre on kerosene and 40 paisa on high speed diesel (HSD) on September 19.

The total cut of PDL on petrol, diesel and kerosene now comes to 37 paisa, 119 paisa and 84 paisa per litre respectively.

The cumulative loss on three key oil products in the second downward adjustment in PDL is estimated at Rs352 million in which the share of diesel stands at Rs306 million followed by Rs26 million on petrol and Rs20 million on kerosene, sources in oil industry said.

When a total monthly loss is calculated after two times reduction in PDL, it is estimated at Rs678.6 million in which revenue loss on HSD is calculated at Rs584 million per month and Rs46 million and Rs48 million on petrol and diesel respectively, they added.

“The target to collect a revenue of Rs45 billion in terms of PDL in the current fiscal year seems difficult to achieve,” an official in an oil industry as well as oil analysts said adding it will have an adverse impact on the total revenue collection for 2002-2003.

The government, however, holds the option to increase or decrease the PDL on every fortnight price revision keeping in view the revenue position as well as consumers’ interest.

The two time cut in PDL was made, as the government claimed, to keep the local prices on lower side in the wake of rising global oil prices on US-Iraq war fears.

Oil industry sources said that in case the international oil prices come down in future — the government will consider to again increase the PDL on three oil products to cover the losses. But chances of a possible fall in global oil prices seem remote as the US-Iraq war tension continues to mount.

The next fortnightly price adjustment is due on October 15, just after five days of general election. The new government will watch the global oil prices very carefully so that it could take any decision on the PDL.

Pakistan’s annual consumption of these three oil products is estimated at 8.5 million tons in which the share of diesel stands at seven million tons. Annual consumption of petrol and kerosene is estimated at 1.1 million tons and 425,000 tons.

A total of 91,600 tons of petrol is consumed every month while the demand of diesel and kerosene is 583,333 tons and 35,416 tons respectively.