The Senate standing committee on Petroleum passed a unanimous resolution on Wednesday for scraping of deemed and customs duty on petroleum products to ease pressure on their prices. The resolution will be presented to the National Assembly for debate on June 19 (today). Talking to Business Recorder, Senator Rukhsana Zuberi said.
"The committee passed a resolution unanimously, strongly recommending to the government to scrape deemed and customs duty on petroleum products and the National Assembly will debate on the issue on Thursday."
The committee members showed a serious concern over continuation of protection granted to the refineries under deemed duty when petroleum products were much lower. They were of the view that since refineries were making huge profit there was no sense in providing them protection in the form of deemed duty any more. The resolution also stressed upon the government to remove custom duty on petroleum products and pass on the benefit to consumers.
Most of the petroleum products were covered under deemed duty to make sure that the refineries get a reasonable profit/ margin when petroleum products prices were very low. Deemed duty was also meant as an incentive for the refineries to encourage their investment for upgradation and expansion to enhance their refining capacity. Deemed duty on some petroleum products was removed in recent years. However, diesel and JP-4 (JP-8) oil were kept under deemed duty regime. The refineries get 10 percent and 5 percent deemed duty on diesel and JP-4 (JP-8) respectively. This regime has been inviting criticism from different stakeholders of oil sector.
The Ministry of Petroleum (MoP), which was instrumental in providing deemed duty for refineries way back in 2002, is also supportive of an end to protective regime for refineries.
Its officials supported the resolution during the meeting of the Senate standing committee. The Federal Board of Revenue (FBR) showed some reluctance to support the resolution particularly scraping of custom duty. However, later one of its official who attended the meeting supported the resolution to pave way for its unanimous acceptance and referencing to the National Assembly for approval.
Comments
Comments are closed.