The government is considering reducing taxes by 50 percent on diesel with the objective of making diesel more cost effective than Compressed Natural Gas (CNG) for public transporters but no mechanism has yet been finalised, well informed sources told Business Recorder.
The sources said this proposal was deliberated at a recent meeting of ministerial committee constituted by Prime Minister Syed Yousuf Raza Gilani. Other committee members are: Minister for Petroleum and Natural Resources, Dr Asim Hussain, Minister for Water and Power, Naveed Qamar, Minister for Labour and Manpower, Syed Khurshid Shah.
The federal government collects massive revenue from POL products. Half of the CNG-consumed vehicles are public transporters inclusive of buses, wagons, pick-ups, taxis and rickshaws and the government no regards their use of CNG as a permanent headache. Besides, the government is also generating power through diesel as fuel in thermal power plants, which is very expensive.
"Yes, we are considering slashing fifty percent taxes on diesel to bring back public transport on diesel," said, Petroleum Minister, Dr Asim Hussain.
A proposal has been sent to the Ministry of Finance to assess its economic viability and as the Petroleum Ministry receives comments, the proposal would be placed before the ECC or the Federal Cabinet, the sources added.
This correspondent made hectic efforts to approach Secretary Finance, Dr Waqar Masood for comments but there was no response from him till the filing of this story.
According to the Ministry of Petroleum, total gas consumption in CNG sector is about 290 MMCFD whereas the Association claims that the volume of gas being used by CNG stations is 250 MMCFD.
Planning Commission maintains that long term decline in gas production is a serious threat to energy security, adding that in case no action is taken the current production of around 4,000 MMCFD will fall to around 2500 MMCFD by 2020 and 400 MMCFD by 2030. According to Pakistan Bureau of Statistics (PBS), Pakistan imported 6,853,400 tons during the first six months (July-December) of current fiscal year as compared to 5,988,770 tons in the same period of last year, showing an increase of 14.55 percent. In terms of price, GoP spent 52 percent more foreign exchange on import of petroleum products as compared to last year due to higher international oil prices.
However, the import of petroleum crude declined to 3,060,132 tons from 3,747,286 tons during this period. A study conducted by the Planning Commission suggests that the Petroleum Policy 2009 with crude oil capped at $100 and soft price curve with high discount rates for incremental blocks results in price of gas hovering around $4-4.5 per MMBTU.
Comments
Comments are closed.