ISLAMABAD: With the government expected to collect about Rs590 billion revenue from the oil and gas sector during next fiscal year, it seeks through the Finance Bill 2012 to divert about Rs12-15 billion to the Federal Consolidated Fund that are to be earned by all the regulatory bodies through surplus receipts, penalties and fines.
A senior government official told Dawn that through the finance bill, the government has introduced amendments in six ordinance and acts of parliament relating to six major regulatory authorities to take away their earnings through fee in excess of their expenditures, various penalties and fines.
These include Pakistan Telecommunication (re-organisation) Act of 1996, Regula-tion of Transmission and Distribution of Electric Power Act of 1997, Securities and Exchange Commission Act of 1997, Pakistan Nuclear Reg-ulatory Authority Ordinance of 2001, Pakistan Electronic Media Regulatory Authority Ordinance of 2002 and Oil and Gas Regulatory Authority Ordinance of 2002.Through identical amendments, the finance bill seeks to transfer of any surplus of receipts over the actual expenditure in a year of that regulator after payment of tax to the federal consolidate fund. The separate but identical amendments, the bill also seeks to remit all fines and penalties imposed by these regulators on their respective regulated sectors to the federal consolidated fund.
These amendments have been made to ensure that surplus funds generated by regulators are shared among the federal and provincial governments under shares fixed by the 7th NFC Award in view of the fact that regulated businesses under these autonomous regulators spread throughout the country.
He explained that out of total Rs590 billion to be earned through petroleum sector, the government was expecting total revenues of Rs70 billion during 2012-13 in the form of general sales tax on natural gas.
Around Rs250-260 billion are expected to come from general sales tax on sale of petroleum products. The two heads – oil and gas sales – are subject to 16 per cent GST.
In addition, the Finance Bill 2012-13 seeks to earn revenues worth Rs120 billion on various petroleum products. The Finance Bill 2012-13 envisages a fixed petroleum levy of Rs8 per liter on high speed diesel, Rs10 per liter on petrol, Rs14 on High Octane Blending Component, Rs9 per liter on E-10 Petrol (blended), Rs6 per liter on kerosene, Rs3 per litre on light diesel and Rs11,486 per ton on locally produced liquefied petroleum gas (LPG).
The official explained that last year the government had targeted collection of Rs120 billion on petroleum products but could collect only Rs69 billion owing to increasing product prices that increased the quantum of general sales tax.
In addition to above mentioned taxes, the government has estimated to generate about Rs150 billion as non-tax revenue through oil and gas sectors against Rs118 billion collected during the current year, showing an increase of about 27 per cent.
Through the finance bill 2012-13, the ministry of petroleum and natural resources has been authorised to collect Infrastructure Gas Development Cess at Rs300 per mmbtu on fertiliser and CNG in Khyber Pakhtunkhwa, Balochistan and Potohar, Rs200 per mmbtu on CNG in Sindh and Punjab, Rs100 per mmbtu on industrial consumers, Wapda, KESC and Independent Power Producers. The government expects to collect about Rs30 billion through this development cess in 2012-13.The government has also estimated to collect Rs31 billion next year as gas development surcharge and Rs22.5 billion as discount retained on local crude oil.
Another Rs22 billion are expected to be collected next year as royalty on crude oil and Rs36 billion as royalty on natural gas.
In addition to this, the government is also expecting a windfall levy against crude oil of Rs5.3 billion next year and Rs1 billion petroleum levy on LPG.
The official said that petroleum development surcharge – later renamed as petroleum levy – and gas development surcharge were imposed in the 1970 with the sole objective of undertaking oil and gas development projects including pipeline and exploration but had silently been converted into a provincial revenue item.
Now in view of upcoming gas import pipeline projects and expansion of pipeline capacity of the gas utilities, the government has separately imposed infrastructure development cess on various gas sectors to finance these upcoming projects.
