The prices of all petroleum products may go significantly abreast of Wednesday (today) due to higher international prices and a few adjustments in tax rates.
Three different options are into account by the govt.
Under one option, based precisely on existing tax rates and oil import price, the ex-depot price of high-speed diesel (HSD) is estimated to travel up by Rs3 per litre which of petrol by about Rs6 per litre.
Under the second option which is predicated on standard 17pc GST and full petroleum levy permissible under the law, the ex-depot prices of HSD and petrol are calculated to travel up by Rs34 and Rs37 per litre, respectively. Under the law, the govt can increase the petroleum levy to a maximum of Rs30 per litre on HSD and petrol, Rs12 on kerosene and Rs10 on light diesel fuel (LDO).
Officials said that supported the current year’s revised revenue estimates, the govt is predicted to adopt a 3rd option. this suggests that the tax rates — petroleum levy just in case “> just in case of HSD and petrol and both petroleum levy and GST in case of kerosene and LDO — would be slightly increased additionally to passing on the impact of upper imported prices. therein case, the costs of all products are going to be increased within the range of Rs7-9 per litre.
Hike to be supported higher international prices, tax adjustments
Currently, the ex-depot price of HSD is Rs112.55 per litre which of petrol Rs110.69 per litre.
The government had already collected the above-targeted revenue on petroleum products through petroleum levy within the 11 months of the present financial year. Therefore, it had been comfortable with minor adjustments in the petroleum levy. consistent with the ministry of finance, the gathering on account of petroleum levy had amounted to Rs370 billion within the first nine months of the current financial year against the annual target of Rs450bn.
Over the last two years, the govt has been tweaking with petroleum levy rates rather than GST because the levy remains within the federal kitty while GST goes to the divisible pool taxes and thus about 57 per cent share of it’s given to the provinces.
Petrol and HSD are two major products that generate most of the revenue for the govt due to their massive and yet growing consumption within the country. Average petrol sales are touching 700,000 tonnes per month against the monthly consumption of around 600,000 tonnes of HSD. The sales of kerosene and LDO are generally but 11,000 and 2,000 tonnes per month, respectively.
Under the revised mechanism, oil prices are revised by the govt on a fortnightly basis to expire the impact of international prices published in Platt’s Oilgram, rather than previous mechanism of monthly calculations on the idea important cost of the Pakistan State Oil.
