ISLAMABAD: The federal government has decided to keep the prices of petroleum products unchanged by adjusting the petroleum levy (PL) and the general sale tax (GST) for second half of current month of May.
The government claims that the decision to maintain the prices at the level of first half of May will bear a revenue loss of Rs2.77 billion.
The Oil and Gas Regulatory Authority had recommended the government to increase the prices of petroleum products up to Rs3.90 per litre, however, the government has decided to maintain the prices at the first half of May.
“In order to provide relief to the common man, the prime minister has decided to maintain the prices of petroleum products as they were on May 1, 2021 and a fortnight before that. The government has to adjust the Petroleum levy and sales tax as well on kerosene oil (SKO) and light diesel oil (LDO) to maintain the same prices,” the Finance Division states.
Through an SRO 551 (I)/2021, the Federal Board of Revenue (FBR) on Monday reduced sales tax on SKO and LDO, effective from May 1, 2021, to keep prices of the petroleum products unchanged during May.
As per the notification dated May 9, 2021, the sales tax on kerosene oil was reduced from 17 percent to 15.44 percent or reduced to Rs7.32 from Rs10.70 per litre on SKO, and from 17 percent to 7.56 percent on LDO.
Currently, the government is not charging any PL on both SKO and LDO.
The notification said that the standard rate of 17 percent will remain the same for motor spirit and high-speed diesel oil for this month.
The oil and gas regulator had calculated increase the ex-depot rate of all petroleum products based at last notified rates of GST and petroleum levy.
The regulatory body had recommended the government to increase the price of petrol by Rs1.93 per litre.
An increase of Rs3.35 per litre in ex-depot price of high speed diesel (HSD) was also recommended.
The regulator further asked to increase the rate of SKO by Rs3.90 per litre and LDO by Rs2.91 per litre.
The government has reduced the PL on petrol by Rs1.65 per litre from Rs6.39 per litre to Rs4.74 per litre and cost of supply/ex-refinery price has increased from Rs75.83 to Rs77.48 per litre.
The rate of GST on petrol is same at Rs15.77 per litre.
The government also maintained the rate of HSD by adjusting rate of PL and cost of supply PSO/ex-refinery prices.
Copyright Business Recorder, 2021
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