No change in petroleum rates as govt cuts levy

Published February 16, 2021
The government on Monday decided not to increase petroleum prices for the next 13 days. — Reuters/File
The government on Monday decided not to increase petroleum prices for the next 13 days. — Reuters/File

ISLAMABAD: The government on Monday decided not to increase petroleum prices for the next 13 days.

This came as a break from continuous price increases over the past five consecutive fortnights. This was despite an increase in international oil prices over the last 15 days. Bye-elections to seven seats of the national and provincial assemblies are scheduled to be held over the next 13 days to complete the electoral college for the senate elections fixed on March 3.

For maintaining the prices at existing level, the petroleum levy (PL) was reduced by Rs3.07 on petrol to Rs17.97 per litre instead of Rs21.04. The PL on HSD is down Rs3.75 per litre to Rs18.36 instead of Rs22.11. Also, the PL on kerosene came down by Rs2.78 per litre to Rs2.76 instead of Rs5.54 per litre at present. The PL on LDO was also reduced by Rs3.26 to Rs3.65 from Rs6.91 per litre.

“Prime Minister Imran Khan has rejected a summary from the Oil & Gas Regulatory Authority (Ogra) for proposed increase in the prices of petroleum products to provide relief to the people,” said a statement issued by the Prime Minister Office.

It said Ogra had recommended Rs14.07 per litre increase in petrol, Rs13.61 in high-speed diesel (HSD), Rs10.79 in kerosene and Rs7.43 in light diesel oil (LDO).

“The government will go to every extent to provide relief to the people,” the statement quoted the prime minister as saying. As such, the ex-depot price of HSD and petrol would remain unchanged at Rs116.07 per litre and Rs111.90 per litre, respectively. Likewise, the ex-depot price of kerosene and LDO would continue at the existing rates of Rs80.19 per litre and Rs79.23 per litre, respectively.

The government has been increasing prices of petroleum products every fortnight since Nov 30, 2020 to pass on the impact of higher international oil prices. Since then the price of HSD has increased by 14.67pc (Rs14.85 per litre), while petrol rate has gone up by 11.13pc (Rs11.20 per litre).

Similarly, the kerosene has jumped by 18.6pc (Rs14.90 per litre) while the LDO by over 26pc (Rs16.37 per litre) in five fortnights.

Under the government instructions, Ogra is required to calculate oil prices on the basis of 17pc general sales tax and maximum petrol levy permissible under the law at Rs30 per litre on HSD and petrol.

An official said the government had already collected about 33pc higher than targeted revenue on petroleum products through petroleum levy in first six months of the current fiscal year. Therefore, it was comfortable with minor adjustments in petroleum levy. According to Ministry of Finance, the collection on account of petroleum levy has amounted to Rs275bn in first six months against annual target of Rs450bn.

Over the last many months, the government has been tweaking with petroleum levy rates instead of GST as levy remains in the federal kitty while GST goes to the divisible pool taxes and thus about 57pc share is grabbed by the provinces.

Published in Dawn, February 16th, 2021

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