Skip to main content

Government considering major cut in petrol, diesel prices

ISLAMABAD: The prices of petroleum products are estimated to decrease substantially for the month of March owing to about 20 per cent fall in oil prices in the international market.

Three different proposals are currently in the field for price cut as the Dubai Crude rate came down from $62 per barrel on Jan 31 to $50 a barrel on Friday, down 19.35pc. On the other hand, the benchmark International Brent price reduced from $60 a barrel to $51 a barrel, down 18.33pc.

An official told Dawn that based on existing tax rates, the Oil & Gas Regulatory Authority (Ogra) had calculated about Rs15 per litre reduction in the price of high speed diesel (HSD) and petrol, respectively.

In contrast, he said the Ministry of Finance and Federal Board of Revenue (FBR) were trying their best to pass on about half of the price reduction calculated by Ogra to consumers and retain the remaining amount as windfall by increasing tax rates.

Finance ministry, FBR want hike in taxes on diesel, petrol to cover revenue losses

He said the finance ministry wanted to make up for revenue losses arising out of lower import parity price for crude and petroleum products and the overall revenue shortfall it had faced in the first eight months of the current fiscal year.

With higher tax rates, another working put the price cut in HSD and petrol by Rs7.23 and Rs5.79 per litre, respectively. On the other hand, on the directives of Prime Minister Imran Khan, the PM’s Delivery Unit (PMDU) had proposed scaling down the HSD price from Rs127 to Rs100 per litre, a reduction of Rs27 per litre.

It also recommended the petrol price for March at Rs100 per litre, down by about Rs15 a litre.

The official said the prime minister had been told that reduction in HSD price would go a long way in bringing down the rate of inflation because it was the primary source of transportation and agriculture in the country.

Also, the price of diesel is lower than petrol in many countries because of its inflationary impact.

The official, however, explained that a drastic restructuring in pricing structure and amendment to rules were required to comply with the PM’s directive and hence would require some time to deliver. Because of these converging views, the Prime Minister Office had ordered Ogra and the ministry of energy to keep the proposed rates strictly confidential and had called another round of consultations on Saturday (today) to reach a final decision.

Based on marathon discussions and deliberations on the subject, the official said the prices of HSD and petrol would be reduced by at least Rs10-11per litre. At present, the ex-depot rate of HSD stands at Rs127.26 per litre and that of petrol Rs116.60 per litre.

The government already increased the general sales tax (GST) on all petroleum products to standard rate of 17pc across the board to generate additional revenues.

Until January last year, the government was charging 0.5pc GST on light diesel oil (LDO), 2pc on kerosene, 8pc on petrol and 13pc on HSD.

Besides the 17pc GST, the government had more than doubled the rate of petroleum levy on HSD in recent months to Rs18 per litre instead of Rs8 per litre. The levy on petrol had also been increased by 50pc to Rs15 per litre instead of Rs10 per litre. The petroleum levy on kerosene oil and LDO remained unchanged at Rs6 and Rs3 per litre, respectively.

Over the last many months, the government had increased petroleum levy rates to partially recoup a major revenue shortfall faced by the FBR. The levy remains in the federal kitty unlike GST that goes to the divisible pool taxes and thus about 57pc cent share is grabbed by the provinces.

The petrol and HSD are two major products that generate most of revenue for the government because of their massive and yet growing consumption in the country.

Total HSD sales are touching 700,000 tonnes per month against monthly consumption of around 600,000 tonnes of petrol. The sales of kerosene oil and LDO are generally less than 10,000 tonnes per month.

Published in Dawn, February 29th, 2020



from The Dawn News - Home https://ift.tt/2To2R7I
via IFTTT
Labels:

Comments

Post a Comment

Popular posts from this blog

Trump says he urged team to ‘slow’ COVID-19 testing

US President Donald Trump said Saturday he was encouraging health officials in his administration to slow down coronavirus testing, arguing that increased tests lead to more cases being discovered. The president has claimed falsely on several occasions that surges of COVID-19 in several states can be explained by greater numbers of diagnostic tests. At his first rally since the outbreak forced nationwide shutdowns in March, Trump told the crowd in Tulsa, Oklahoma that testing was a “double-edged sword.” The United States — which has more deaths and cases than any other country — has carried out more than 25 million coronavirus tests, placing it outside the top 20 countries in the world, per capita. “Here is the bad part: When you do testing to that extent, you are going to find more people, you will find more cases,” Trump argued. “So I said to my people ‘slow the testing down.’ They test and they test.” It was not clear from Trump’s tone if he was playing to the crowd, who ...
Post a Comment
Read more

Rouhani calls Imran, discusses resumption of trade

ISLAMABAD: Pakistan and Iran on Wednesday discussed full resumption of bilateral trade, which was halted last month because of the Covid-19 pandemic. “The two sides stressed the need to reactivate borders and border markets and strengthen trade ties by following health guidelines,” a statement issued by the Iranian presidency on the telephonic conversation between Prime Minister Imran Khan and President Dr Hassan Rouhani said. President Rouhani had called the prime minister for Ramazan greetings. Border trade between the two countries was suspended after a meeting of the National Security Committee (NSC), held on March 13, decided to close all borders because of the pandemic. Islamabad partially relaxed the restrictions on April 21, allowing the import of certain food items and provision of petrol and diesel to the border areas. Cargo traffic from Iran was allowed for three days every week. Cargo movement between the two countries takes place through five border crossings — Taftan...
Post a Comment
Read more

Today’s outlook: Sindh CM discusses reopening markets with PM Khan

Here are some of the stories we are expecting to follow today (Thursday): Sindh Chief Minister Murad Ali Shah will take Prime Minister Imran Khan into confidence over reopening shops and markets across the province. The reopened markets will have to follow SOPs. Sindh Transport Minister Awais Qadir Shah will discuss SOPs with transporters for resuming public transport in the coming days. The meeting will be held at the Sindh Assembly building at 1:30pm. The Oil and Gas Regulatory Authority has proposed a price cut of Rs20.68 per litre for petrol in its summary. Imam-e-Kaaba Sheikh Abdul Rahman Al-Sudais has said Masjid Al Haram and Masjid Al Nabawi will be reopened for worshipers soon. He said the Kaaba is being sterilised using latest technologies. Punjab Chief Minister Usman Buzdar will head various meetings during his visit to Bahawalpur. As of Thursday, Pakistan has reported more than 15,500 confirmed coronavirus cases. ICYMI: An amendment to the National Accountability Or...
Post a Comment
Read more