LAHORE         -       The Pakistan Industrial and Traders Associations Front (PIAF) on Sunday rejected a meagre cut of just 25 paisas in petrol prices, terming it a cruel joke with trade and industry which is already facing a record high production cost, stressing the government to announce a proportionate cut in fuel rates in line with the prices of international market.

PIAF Chairman Mian Nauman Kabir lashed out at the government after a slight reduction in the prices of petroleum products, saying petroleum prices in the country hit the highest-ever mark since June this year when the government announced a four percent increase in oil prices in one go.

It’s unfortunate that only 0.2 percent adjustment was made even though the international crude market price is at $62 per barrel, which is almost half of the 2008 highest record of $147 when retail prices stood below Rs.80 per litre.

The PIAF chairman observed that the crude price had dropped by 4 percent in the Arabian Gulf Market over the last month from $68 per barrel during the last couple of weeks, but the authorities are not ready to pass on full benefit of oil price cut in global market.

The PIAF chairman said that it is unfortunate that besides the 17% GST, the government has more than doubled the rate of petroleum levy on HSD in recent months to Rs.21 per litre from Rs.8 per litre, while levy on petrol has also been increased by 50% to Rs.17.20 per litre from Rs.10 per litre.

Moreover, the government has already increased general sales tax on all petroleum products to the standard rate of 17% to generate additional revenue. Until January this year, the government was charging 0.5% GST on LDO, 2% on kerosene, 8% on petrol and 13% on HSD.

PIAF senior vice chairman Nasir Hameed observed that this hike in fuel rates would lead to increasing cost of production and cost of doing business as well. He argued that the high cost of doing business is hindering Pakistan in achieving its export target.

He said though the prices of oil in global market are fluctuating yet the authorities can keep the rates stable by reducing tax ratio which is highest in the region.

He lamented that the government, in November 2019, increased the prices of three major petroleum products of high speed diesel (HSD), petrol and liquefied petroleum gas while reduced the prices of two comparatively insignificant products of kerosene and light diesel oil (LDO) whose consumption is not so high.

He said that in October 2019, the government had kept the petroleum prices unchanged to earn windfall revenue of over Rs4.5 billion despite up to 2.6 percent cut worked out by the OGRA for that month. The government had instead increased the petroleum levy on HSD and petrol for that period.

Over the last few months, the government has started increasing petroleum levy rates to partially recoup a major revenue shortfall faced by the Federal Board of Revenue in the first quarter of the current fiscal.