ISLAMABAD: Federal government has proposed to increase the petroleum levy (PL) on petroleum products by Rs 327 billion to Rs 869 billion in financial year 2023-24 against the revised estimates of current financial year of Rs 542 billion.
The actual PL budgeted for the current year was Rs 855 billion, a target missed by Rs 313 billion due to the increase in its international oil price, high premium and the exchange rate loss of Pakistan State Oil (PSO) which imported fuel to meet 80 percent of total fuel consumption of the country.
To achieve the PL target, the government is considering increasing the PL rates to Rs60 per litre on petroleum products from the existing maximum limit at Rs 50 per litre allowed under the Finance Bill 2022-23.
Petrol price slashed by Rs12, HSD’s by Rs30
The government revised its PL collection target upward for next financial year 2023-24 under miscellaneous receipts. The PL revenue has been given a high priority by subsequent federal governments as it is not part of the Federal Divisible Pool (FDP) that has to be shared with the provinces as per the National Finance Commission (NFC) formula.
The government has also proposed a massive raise in Gas Infrastructure Development Cess (GIDC) collection by 41 billion to Rs 50 billion for 2023-24 against the revised target of Rs 9 billion in 2022-23. The original budgeted GIDC in current financial year was Rs 30 billion.
In June 2020, the Supreme Court of Pakistan ruled that various sectors of the economy must clear outstanding Rs407 billion GIDC in 60 months but the government has yet to realize this amount due to stay orders by various companies.
Gas Development Surcharge (GDS) - the difference between prescribed and sale price of gas that goes to provinces - is expected to bring Rs 40 billion next year against actual budgeted Rs 40 billion and revised Rs 14 billion in the current year.
On the directives of Finance Ministry, Auditor General of Pakistan (AGP) is auditing the GIDC and GDS claims of both gas companies-Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company (SSGC) to ascertain the real collection.
For PL on LPG, the government has budgeted Rs 12 billion for financial year 2023-24 against Rs 3.450 billion revised target of current financial year. The rate of PL on LPG has been proposed to be raised to get additional revenue of Rs 9.450 billion. The current financial year’s actual budgeted estimated was Rs 8 billion.
The budget for 2023-24 also envisages Rs 20 billion under discount retained on local crude prices. Same amount was envisaged for the outgoing financial year.
The budget for next year also proposes a decrease in royalty on crude oil and increase in royalty on natural gas for provinces. The budgeted amount for royalty on crude oil is set at Rs 50 billion for next financial year against the revised estimates of Rs 54 billion for the outgoing year. The government has budgeted Rs 75 billion in royalty on natural gas in the next financial year against a revised target of Rs 65 billion in 2022-23.
The next year’s budget envisages Rs 35 billion on account of windfall levy on crude oil against Rs 30 billion for the current financial year 2022-23.
Miscellaneous receipts of oil and gas companies are budgeted to generate Rs 1141 billion in next financial year against a revised target of Rs 737.45 billion and budgeted estimates of Rs1144 billion in the outgoing financial year.
Copyright Business Recorder, 2023
Comments
Comments are closed.