ISLAMABAD - The caretaker government on Thursday decided not to increase the prices of petroleum products for the ongoing month of June, which would result in revenue loss on account of sales tax and petroleum levy.

The previous PML-N government on last date of May had deferred the POL price increase till mid-night June 7 and left it for the caretaker setup to make the final determination in this regard. However, the interim government has decided to maintain the oil prices for rest of the month.

On 30th May, the Oil and Gas Regulatory Authority (Ogra) had recommended an increase of up to 16.9 percent in prices of petroleum products for June 2018. In a summary moved to the Ministry of Energy (Petroleum Division) and Finance, the Ogra had proposed an upward revision in oil prices and recommended up to 16.9 per cent increase in prices of different petroleum products. According to the Ogra summary, an increase of Rs12.50 (12.7pc) was recommended in the price of HSD and Rs8.37 per litre (9.5pc) in the price of motor spirit (petrol). Similarly, Rs8.23 per litre (10.3pc) increase was recommended in the prices of kerosene oil and Rs 11.65 (16.9pc) in light diesel oil (LDO) rate. The prices of all petroleum products, except for kerosene, are deregulated and Ogra only monitors their prices.

However, the caretaker government has rejected the summary of Ogra for increasing oil prices.

Following the government decision not to increase the prices of petroleum products, the FBR has sharply reduced the rate of GST on almost all the petroleum products. Against the earlier GST of 27.5 percent on high speed diesel the rate was reduced to 17 percent while against 15 percent on motor spirit it was reduced to 7 percent. Similarly, FBR has also reduced the rate of GST on Super Kerosene oil from 12 percent to 7 percent and from 11.5 percent on light diesel oil to one percent.

Sources in FBR informed The Nation that the government will suffer approximately Rs20 to Rs25 billion revenue loss on account of the sales tax and petroleum levy for maintaining the petroleum price at the existing level for one month.

The FBR would have to collect mammoth challenge of collecting Rs661 billion in the ongoing month (June) to meet the revised tax collection target of Rs3.935 trillion for the current fiscal year. The federal government had already revised the tax collection target to Rs3.935 trillion for the outgoing fiscal year from the Rs4.013 trillion. However, FBR officials believe that they may not achieve the target, as collecting Rs661 billion in single month is a gigantic task. The FBR had collected Rs3.274 trillion during eleven months (July to May) of the ongoing fiscal year as against Rs2.854 trillion during the same period of the previous fiscal year, registering 14.4 percent growth in collection.

 

IMRAN ALI KUNDI