Government enhances Petroleum Levy on petrol products
Yes, you read that right! In order to meet its revenue shortfall, the federal government has piled up taxes on various petroleum products. According to sources, the government has enhanced the sales tax rate on petrol to 17 percent.
The petroleum levy on high-speed diesel (HSD) has been fixed at Rs. 30 per litre, while the sales tax on HSC will be 17 percent to generate additional revenues, according to the sources.
Likewise, the government has raised the rate of levy on kerosene by six rupees per litre, while the sales tax on kerosene will be 17 percent.
The petroleum levy on light diesel oil was increased from Rs. 3 to Rs. 4.94 per litre, showing an increase of 65pc or Rs. 1.94 per litre.
Effective immediately, you’ll be paying Rs. 100.10 (74.52 + 25.58) for 1 liter of petrol as confirmed by the Finance Division through an official notification on Friday. A decrease in petroleum price was one of the few positives during this difficult time when the entire world is battling against the deadly novel coronavirus however, the petrol price in Pakistan will go up by Rs. 25 as per the new notification.
The demand for petroleum went down during the lockdown around the globe, which resulted in a decrease in petroleum prices. Now, as the world is slowly starting to get back to normalcy, the prices of crude oil in the international market have jumped from $20 per barrel a couple of months ago to $41.18 per barrel in June.
This significant increase in the petrol price by the Pak govt. will hugely impact the lives of its citizens that are already facing serious financial issues due to the coronavirus-induced lockdown.
There is an important point to consider in this matter, that usually OGRA (Oil and Gas Regulatory Authority) is the one that does the price revision work, but here it was the Petroleum Division that was consulted by the govt. before deciding to hike the prices by such a huge amount.
And, recently the same petroleum division was blamed for conspiring with the OMCs for creating an artificial shortage of petroleum products in the country. And even the PM ordered to revoke the licenses of 9 OMCs based on the initial inquiry report findings.
OGRA took action and registered cases and imposed monetary penalties (Rs40 million fine) on the OMCs. This artificial shortage created by OMCs hurt the PSO badly as it had to meet the supply needs by purchasing oil at higher prices. And now the same companies that were involved in hoarding will make a fortune by selling the hoarded goods on the newly raised prices.
The notification issued by the Finance division also informed about the increase in other fuel products. Kerosene oil got the second-highest increase of Rs23.50 and is now sold at Rs59.06 per liter.
Diesel price per liter got increased by Rs21.31 and is selling for Rs101.46 per liter. As diesel is the main fuel for major sectors like agriculture and transport, the increase in its price will increase the rate of inflation. While the price of LDO (light diesel oil) got a raise of Rs.17.84 and is now available for Rs55.98 per liter.
The government also charges a 17% sales tax on every liter of petrol, and currently, we pay approximately Rs41 to the govt. on every liter of petrol we purchase.
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