ISLAMABAD, June 1: The government collected a revenue of more than Rs72 billion in the oil and gas sector in nine months of the current fiscal year, which is much higher than the target of Rs48 billion for the whole year.

The nine-month revenue collection in the oil and gas sector — comprising development levies, surcharges and royalty — is about 56 per cent higher than the corresponding period of last year when it stood at Rs46 billion.

This revenue is in addition to tax revenue that the government collects on petroleum products and gas in the form of 15 per cent GST and other taxes like excise etc, which separately form part of indirect taxes.

The collection of oil and gas surcharges at Rs51 billion in nine months this year is over 61 per cent higher than last year’s collection of Rs31.6 billion, reveals the Ministry of Finance’s third quarterly data on fiscal operations.

The nine-month collection in the form of surcharges on oil and gas is about 183 per cent higher than the budgeted target of Rs18 billion.

The government collected about Rs23 billion as surcharge on oil in six months as a result of higher international prices, although it had announced in the budget not to raise revenue on this account. Despite such a higher collection, the government has been delaying payments to oil companies on account of price differential claims (PDC) that stood at about Rs18 billion as of May 31. The government had also announced an Rs10 billion subsidy on oil prices in the budget to cover PDC on diesel. The government, however, never disclosed how much it collected on oil prices as 15 per cent sales tax and other duties.

Similarly, the development surcharge on oil at Rs23 billion in nine months of the current year is more than 47 per cent higher than Rs15.7 billion collected in first nine months of the last financial year, although the government was using it as a revenue source last year.

Likewise, the government had projected in the budget to collect Rs18 billion on account of gas development surcharge (GDS). It has already raised Rs28 billion in first nine months of the current year, higher by Rs10 billion or 55 per cent than the full year target. GDS collection this year is also about 76 per cent higher than Rs15.88 billion collected during the same period last year.

In addition to these surcharges, the government also recovered Rs21 billion on account of royalty on oil and gas in first nine months of the current fiscal year as against Rs15 billion in the same period last year, showing an increase of 40 per cent. Sales tax collection also increased significantly because of its fixed 15 per cent rate which automatically goes up with higher sale rates.

The data shows the government contained its budget deficit at Rs273 billion or 3.1 per cent of the GDP by containing defence expenditure and earning higher surcharges, which otherwise would have been much higher. The budget deficit in the first nine months of the last year was Rs201 billion or 2.7 per cent of the GDP. So, the budget deficit is higher than last year both in absolute terms and as ratio of the GDP.

The defence expenditure declined by Rs3 billion to Rs172.7 billion during the first nine months of the current fiscal as compared to Rs175.8 billion in the same period last year. If this trend continues, defence expenditure is expected to be around Rs230 billion, even lower than last year’s revised estimates of Rs241 billion. The budgeted target for defence expenditure for the current fiscal year had been put at Rs250 billion.

The official statistics also suggest that while the total revenue at 10.2 per cent of the GDP was slightly higher than 9.84 per cent of last year, the rate of total expenditure also increased to 13.3 per cent of the GDP this year as against 12.53 per cent last year.

The data shows that external borrowing slightly declined to Rs94 billion in first nine months this year as compared to Rs100 billion last year. Domestic borrowing, however, increased by almost 80 per cent to Rs179 billion against Rs101 billion of the same period last year.