Rs nine per litre petroleum levy on ethanol blended motor gasoline likely

The government may impose rupees nine per litre Petroleum Levy (PL) on ethanol blended motor gasoline E-10 after the Ministry of Petroleum and Ministry of Industries backed the proposal in a bid to enhance revenue collection during the 2009-10 financial year.
Sources in Oil and Gas Regulatory Authority (Ogra) said that the authority had worked out price fixing mechanism of ethanol blended motor gasoline that was presented in a recent meeting held in the Petroleum Ministry under the chairmanship of Minister for Petroleum and Natural Resources Syed Naveed Qamar.
The Ogra is currently working with co-ordination of concerned ministries on the price mechanism for ethanol blended fuel. According to sources, while working on the price determination mechanism based on mogas price effective on Aug1, the Ogra has worked out rupees nine per litre PL on ethanol blended fuel against Rs 10 per litre PL on petrol.
The Ministry of Industries and Production circulated draft summary pertaining to mechanism for determination/fixing of E-10 Motor gasoline prices worked out by the Ogra on August 19, 2009. The Ministry of Petroleum and Natural Resources conveyed its no objection to the proposal given by the Ministry of Industries and Production in the draft summary for the ECC.
Determination of E-10 Motor gasoline price as per ECC decision taken on May 19, 2009 was finalised in the meeting held on August 13, 2009, under the chairmanship of Secretary of Industries and Production, attended by Syed Jawed Naseem, Sr. Executive Director, Finance of Ogra. The Ministry of Petroleum and Natural Resources supported the proposal.
The Ministry of Industries and Production submitted a summary for the ECC of the Cabinet in second week of May, 2009 for approval of the following proposals:
-- E-10 motor vehicle fuel be marketed on trial basis in PSO stations in Islamabad/ Rawalpindi.
-- To incentivise the use of E-10, it was proposed to keep its price at 10 percent less then that of gasoline. This will entail a financial implication of Rs 232 million annually. It was recommended to exempt ethanol compound of E10 from petroleum development levy and GST and Subsidy of Rs 2.83/litre for E-10.
-- The Ministry of Petroleum and Natural Resources may notify E-10 as motor vehicle fuel, while Ogra may determine/ notify ex-depot and retail price of E 10 for one litre. The ECC of the Cabinet in its meeting held on May 19, 2009 considered the summary and allowed marketing of E-10 motor vehicle fuel on trial basis. The ECC also allowed the Ministry of Petroleum and Natural Resources to notify E10 as motor vehicle fuel and authorised the Ogra to determine/notify ex-depot and retail price of E-10 for one litre.
It directed all concerned to carry out amendments in the Ogra Ordinance. The Ministry of Petroleum and Natural Resources on its part has implemented the decision with regard to notification of E-10 specification and inclusion of E-10 Motor gasoline in the Petroleum Products (petroleum development levy) Ordinance 1961.