KARACHI: The government hopes to generate Rs425 billion from oil and gas sector under different heads in the fiscal year 2015-16, the budget documents show.

Last year’s break-up of revenue receipts contradicted the official position that the government collection fell because of dip in oil prices.

The budget documents show that the royalty on oil has drastically been slashed to Rs18.37bn in the fiscal year 2015-16 compared to last year’s Rs32.26bn.

Similarly, royalty on gas was also reduced to Rs40.25bn compared to Rs49.16bn of last year.

The revised estimates for the last fiscal year were Rs37.5bn.

The windfall levy on crude oil has been set as Rs18bn compared to Rs17bn of last fiscal year.

The budget also reveals that the discount retained on local crude prices will earn the government Rs21bn compared to the same amount of the revised figure of the last fiscal year.

The petroleum levy on LPG will be Rs2bn, the same amount it received in the last fiscal year.

The government will receive a whopping Rs145bn from Gas Infrastructure Development Cess. The levy has been widely criticised.

The documents also showed that Rs30bn will be charged under the head of natural gas development surcharge. The same amount was received in the last fiscal year.

The second biggest amount from this sector will be collected under the head of petroleum levy which will be around Rs135bn.

Last year the revised amount stood at Rs126bn. The government hopes to receive Rs15.8bn on account of excise duty on gas. It adds up to Rs409bn.

Oil and gas is one of the biggest revenue generating sectors, and its share in the total pie has consistently been increasing.

Published in Dawn, June 10th, 2015

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