The government has decided not to change oil prices until the next budget to meet the revenue target set in consultation with the International Monetary Fund (IMF). Sources told Business Recorder that this is the policy decision because the government wants to meet the revenue target through Petroleum Development Levy (PDL) collected by taxing petroleum products.
Pakistan has committed to the IMF during talks held in February in Dubai that it will meet the revenue target through PDL collection. The government is currently collecting around Rs 17 billion PDL per month and the home team recently negotiating with the IMF in Dubai had informed the delegation that the only major source of revenue collection for the government is PDL, which is being collected on the sale of petroleum products such as petrol, diesel, HOBC, jet fuels and kerosene oil. The government has collected Rs 53 billion PDL during July-February 2008-09 by not passing on the full impact of global oil prices reduction to consumers.
The government is currently collecting Rs 14.91 per litre on petrol, Rs 19.56 per litre on HOBC, Rs 8.79 per litre on kerosene oil, 6.89 per litre on light diesel oil, Rs 3 per litre on JP-1, JP-4 and JP-8. This is in addition to General Sales Tax (GST) of Rs 4.99 per litre on JP-1, Rs 2.26 per litre on JP-8, Rs 7.95 per litre on petrol, Rs 9.94 per litre on HOBC, Rs 7.15 per litre on kerosene oil and Rs 6.62 per litre on light diesel oil.
The country is facing problems in meeting the revenue target and the key revenue generating sectors, such as large-scale manufacturing is on the decline. Experts see a decline in the sales tax collections in the next fiscal year also due to decline in purchasing power of ordinary citizens.
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