The government has set a revenue target of Rs 359 billion for financial year 2019-20 - slightly higher than the revised estimates of Rs 339 billion in 2018-19. The government has set a revenue target of Rs 256 billion from petroleum levy, GIDC and natural gas development surcharge on oil and gas sector against the revised estimate of Rs 305 billion in the current financial year.
A target of Rs 216 billion has been set for petroleum levy collection for next financial year higher than the current year's revised estimates of Rs 203 billion. The government could not achieve the targeted collection of Rs 300 billion through petroleum levy despite amended Petroleum Products (Petroleum Levy) Ordinance 1961 (XXV of 1961) under Financial Bill 2018-19. Under the amendment, the government may impose up to Rs 30 per litre petroleum levy on all petroleum products including motor spirit (MS) and high speed diesel (HSD). The amendment also put a ceiling of petroleum levy of Rs 20,000 per metric ton on indigenous liquefied petroleum gas (LPG) production.
Under the head of GIDC, the government has budgeted collections at Rs 30 billion for next fiscal year due to less recovery during the ongoing financial year. The funds gathered from this source are to be spent on infrastructure for gas import projects like liquefied natural gas (LNG) and pipelines from Iran and Turkmenistan. The revised estimate for the current year was Rs 25 billion.
In April 2019, the federal government announced an amnesty scheme for recovery of outstanding GIDC through GIDC Amendment Act 2019, which remains pending with the Ministry of Law and Justice for vetting. Main features of GIDC amendment Act, 2019 are out of court settlement for litigants and 50 per cent waiver of arrears held up due to protracted litigation.
An amount of Rs 289 billion was collected from January 2012 to February 2019 on account of GIDC from industry, Captive Power Plants (CPPs), Independent Power Producers (IPPs), Karachi Electric (KE), Generation Companies (Gencos), CNG sectors and fertilizer sector against total accrued amount of Rs 741 billion. An amount of Rs 452 billion is still outstanding.
The natural gas development surcharge, which is the difference between the prescribed and selling price of gas to provinces, is expected to bring in Rs 10 billion in 2019-20. During the current year, the budgeted target was Rs 16 billion but revised estimates were Rs 8 billion due to low production of gas. The natural gas production has shown 1.98 percent negative growth in current financial year.
For financial year 2019-20, the government has projected generating Rs 103 billion from royalty on oil and gas, discount on local crude oil, windfall levy on crude oil and petroleum levy on LPG; the revised estimates for the current year was Rs 102 billion.
The government has budgeted discount retained on local crude price at Rs 16 billion, royalty on crude oil at Rs 24.6 billion, royalty on natural gas at Rs 51.5 billion, windfall levy against crude oil at Rs 7 billion and petroleum levy on LPG at Rs 4 billion for next financial year.
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