ISLAMABAD: The federal government has set an ambitious target to collect Rs1.28 trillion through the petroleum levy in the fiscal year 2024-25, marking a 47.4 per cent increase over the previous year’s goal.
In the outgoing fiscal year, the government collected Rs960 billion from the petroleum levy, surpassing the original target of Rs869bn. The budget for the upcoming fiscal year projects an additional Rs321bn in collections.
Moreover, Rs28bn is expected to be collected from the levy on crude oil, the same amount collected in the outgoing year compared to a target of Rs35bn. The newly introduced levy on gas is projected to generate Rs400 million, despite not being included in the original budget for 2023-24, but Rs220m was still collected under this head.
Miscellaneous receipts from oil and gas companies are anticipated to generate Rs1.52tr in 2024-25. In the current fiscal year, the revised target led to a collection of Rs1.19tr, compared to the original budget estimate of Rs1.14tr.
The Gas Infrastructure Development Cess (GIDC) collection target remains at Rs2.5bn for 2024-25. The original target for 2023-24 was Rs40bn, but the actual collection amounted to only Rs2.5bn.
For the Natural Gas Development Surcharge (GDS), which represents the difference between the prescribed and sale price of gas allocated to provinces, the government projects Rs25.61bn for the next fiscal year. The original estimate for 2023-24 was Rs40bn, but actual collections were Rs27.16bn.
The government also plans to collect Rs3.53bn through the petroleum levy on Liquefied Petroleum Gas (LPG) in 2024-25, slightly up from the Rs3.51bn collected in the current year.
The budget for 2024-25 includes Rs25bn to be retained as a discount on local crude oil prices, consistent with the revised estimate for the current year but up from the original budget of Rs20bn.
Additionally, the budget proposes a decrease in the royalty on crude oil and an increase in the royalty on natural gas for provinces. The royalty on crude oil is set at Rs58.65bn, while the royalty on natural gas is budgeted at Rs103.751bn for 2024-25.
Published in Dawn, June 13th, 2024
