ISLAMABAD, Sept 10: Pakistan plans to re-start supplies of petroleum products to Afghanistan within a few days but without tax and duty exemptions on oil export earlier admissible to the neighbouring nation. Secretary Petroleum and Natural Resources Dr Waqar Masood Khan told a Senate Standing Committee on Petroleum led by Mohammad Yousaf that Pakistan did not stop as such the export of petroleum products to Afghanistan.
These supplies had come to an end because of suspension of supplies of goods and products to Nato forces in Afghanistan in the wake of Salala border incident in which over two dozen Pakistanp troops were killed.
He said Pakistan used to export petroleum products to Afghanistan without taxes and duties applicable in Pakistan and such exports were permissible against a rebate against these taxes. He said the Economic Coordiantion Committee had decided to withdraw these tax exemptions on oil exports to Kabul.
A decision to allow oil products to Afghanistan without tax exemptions has already been taken, he said adding a letter had been forwarded to the ministries of commerce and foreign affairs for some minor clarifications. ”The oil supplies to Afghanistan would resume in a matter of days”, he said.
At least two senators from Khyber Pakhtunkhwa were critical of the decision to withdraw tax exemptions on oil exports to Afghanistan.
The ECC had decided early this year to withdraw all tax exemptions on oil exports to Afghanistan in view of substantial waste of foreign exchange, revenue loss and resultant shortage of various products in the domestic market but supplies could not startowing to procedural difficulties even though Nato supplies were restored about two months ago.
“Retail product prices in the domestic market would be the export prices,” said a senior government official said, adding the domestic consumers could not be treated unfairly for the benefit of consumers elsewhere, particularly in Afghanistan.
Generally, four major products — petrol, high-speed diesel and two types of jet fuel — were being exported to Afghanistan for the US-led coalition forces and Afghan consumers at almost 35 per cent lower than the rates in Pakistan as these did not attract petroleum levy and general sales tax that domestic consumers pay at a rate of Rs25-40 per litre.
Pakistan used to export about one million tons of jet fuel, 35,000 tons of petrol and about 150,000 tons of high-speed diesel to Nato forces in Afghanistan every year. Smaller quantities exported to Afghanistan ultimately reached Central Asian States.
But most of the exports were smuggled back into Khyber Pakhtunkhwa because of higher retail rates in the domestic market.
Some leading Pakistani oil marketing companies were also using the export facility for dumping their products inside Pakistan and claimed duty drawback and refunds available to exports, depriving the exchequer of Rs6-14 per litre of petroleum levy and 16 per cent GST.
POL price hike
The committee expressed dissatisfaction over rising trend in oil products with particular reference to recent price hike and asked the ministries of petroleum and finance to provide full record of all taxes and duties recovered from consumers over the last three years so that the committee could make proper recommendations to the government.
Usman Saifullah Khan said the Indian government provide over $17 billion worth of subsidies on oil products to its consumers despite surge in international prices and insisted lifestyles of Pakistani consumers did not allow unhindered increases in POL prices.
He said it was also illogical that despite a wide gap between the rich and the poor, the government was charging the same rate of taxes to all without caring for their difficulties.