Government undecided on fuel rates

Published November 30, 2018
Asad Umar likely to adopt middle ground by keeping prices unchanged, yet generating higher revenue than previous months. — APP/File
Asad Umar likely to adopt middle ground by keeping prices unchanged, yet generating higher revenue than previous months. — APP/File

ISLAMABAD: The government is in a fix over the issue of changes in oil prices due to falling international market and its changing strategy to start mopping up revenues to finance the growing fiscal deficit.

Informed sources said the Oil & Gas Regulatory Authority (Ogra) has put up two positions to the government.

Under the first option based on existing tax rates, it has worked out Rs9 and Rs4.50 per litre reduction in the prices of petrol and high-speed diesel (HSD), respectively for December to pass on to consumers the benefit of lower international market.

The second option is based on written orders of the Federal Board of Revenue that seeks full application of petroleum levy and 17 per cent sales tax to meet its Rs70 billion revenue shortfall in 4MFY19. Under this, the petrol price has been worked out to increase by Rs6.15 per litre and HSD by Rs2 per litre.

He said the government was, however, not sure about the issue because of domestic political considerations and the need to build relationship with the International Monetary Fund (IMF) for a bailout package.

Over the last few weeks, international benchmark Brent prices have tumbled by almost 15pc to less than $60, but the IMF is reported to have advised the authorities to raise taxes to create buffers.

According to the official, Finance Minister Asad Umar was likely to adopt a middle ground by keeping the prices unchanged and yet generating higher revenues than previous months.

Published in Dawn, November 30th, 2018

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Judiciary’s SOS
Updated 28 Mar, 2024

Judiciary’s SOS

The ball is now in CJP Isa’s court, and he will feel pressure to take action.
Data protection
28 Mar, 2024

Data protection

WHAT do we want? Data protection laws. When do we want them? Immediately. Without delay, if we are to prevent ...
Selling humans
28 Mar, 2024

Selling humans

HUMAN traders feed off economic distress; they peddle promises of a better life to the impoverished who, mired in...
New terror wave
Updated 27 Mar, 2024

New terror wave

The time has come for decisive government action against militancy.
Development costs
27 Mar, 2024

Development costs

A HEFTY escalation of 30pc in the cost of ongoing federal development schemes is one of the many decisions where the...
Aitchison controversy
Updated 27 Mar, 2024

Aitchison controversy

It is hoped that higher authorities realise that politics and nepotism have no place in schools.