ISLAMABAD: The government on Wednesday increased the prices of petrol and high speed diesel (HSD) by Rs2 and Rs2.7 per litre, respectively, for the month of December, passing on to consumers the partial impact of hike in prices in the international market.

The decision was announced by Finance Minister Ishaq Dar at a press conference where he also unveiled plans to launch “the harshest crackdown” on smuggling of gold and foreign exchange across the country.

On the occasion, the minister also announced that the deadline to file income tax returns had been extended for another 15 days, and defended tax concessions being extended to the real estate sector.

The minister said that three of the four demands put forth by the Pakistan Peoples Party were “fair and doable”. Matters relating to the fourth one, about the Panama Papers scam, were already being dealt with by the Supreme Court.

He told journalists that the Oil and Gas Regulatory Authority (Ogra) had recommended 6.24 per cent increase in the price of petrol, 7.47pc in that of HSD and 6.49pc in that of kerosene, and a reduction of 0.29pc in the price of light diesel oil (LDO).

On the advice of the prime minister, however, the government decided to increase the price of petrol by Rs2 per litre and absorb the remaining Rs2.01, Mr Dar said.

Crackdown on gold, forex smuggling ordered

Similarly, the government decided to increase the price of HSD by Rs2.7 per litre and absorb the remaining Rs2.72. Put differently, the prices of petrol and diesel were increased by 3pc and 3.72pc, respectively.

He said the prime minister had asked his ministry to refrain from increasing the price of kerosene. The prices of kerosene and LDO would, therefore, remain unchanged for December.

By passing on to consumers only the partial impact of hike in international oil prices the government would be absorbing some Rs4 billion in revenue losses, Mr Dar said. The government did not increase petroleum prices for a full seven months.

The minister said the price of petrol had partly been increased due to improvement in its quality to 92-RON (Research Octane Number) from the existing 87-RON. The new product would be available throughout the month in the country.

Petrol would now be sold for Rs66.27 per litre at the depot level instead of Rs64.27, while HSD would be sold for Rs75.24 per litre instead of Rs72.52.

Crackdown

The finance minister said he had ordered “the harshest crackdown” on smuggling of gold and foreign exchange. The people who had indulged in wrongdoing during the tenures of previous PML-N governments had been taken to task and those who were doing the same under the current government would have to pay the price as well.

Mr Dar said the difference in gold price in Dubai and Karachi was about Rs2,000 per tola and some estimates put bullion smuggling as high as 10,000 tola per day. “Action will be taken against forex and bullion smuggling which is detrimental to the interests of Pakistan. Action will also be taken against those who are behind this illegal practice,” he said.

He said the Federal Inves­tigation Agency, Intelli­gence Bureau, Customs Intelli­gence and State Bank of Pakistan had been directed to keep strict vigilance in this regard at all the airports across the country.

Responding to a question, Mr Dar said the provincial governments had reported a 15pc decline in transactions after tax rates under the new land valuation tables had been introduced.

He said the real estate sector had accepted the government’s move for documentation of the Rs4-7 trillion sector but was against 200pc to 1,000pc increase in valuation.

A National Assembly committee, he said, had recommended some relaxations in rates which were acceptable to the government.

He said receipts from the tax even after relaxations would be much higher than last year.

Published in Dawn December 1st, 2016