The government Saturday decided to slash prices of petrol and diesel to provide relief to consumers in April 2018. The government has reduced prices of petrol and diesel by Rs 2.07 and Rs 2.00 per liter, respectively for April 2018. However, it decided to maintain the prices of kerosene oil and light diesel oil at the level of March 2018.
The new prices of petrol have been set at Rs 86 per liter and high speed diesel (HSD) at Rs 96.45 per liter. The prices of kerosene oil and light diesel oil (LDO) have been maintained at Rs 76.46 per liter and Rs 65.30 per liter, respectively. When the prices were increased last month, various commerce and business bodies criticised the govt decision. The high speed diesel is a common fuel for all the transporting vehicles and the business bodies are of the opinion that increasing the price of diesel will also increase the rates of household products.
In a statement, the Finance Ministry said, "The Oil and Gas Regulatory Authority (Ogra) has proposed increase in the price of diesel by Rs 0.65 per liter but keeping in view the fact that diesel is primarily used in public transportation, transportation of goods, and also in farm equipment, the government decided not to burden the public at large with higher rates of diesel. The Ogra had recommended a greater price reduction in the price of petrol, but keeping on mind that in previous months the government had reduced the price of petrol by more than what Ogra had recommended, and given the rising price of crude oil in the international market, the government took the decision to reduce the price of petrol by Rs 2.07 per liter."
Finally, the prices of kerosene oil and LDO are being maintained at the level as of March 2018 even though Ogra had recommended an increase in the rates of both these products. At present, two types of taxes are being charged from consumers - petroleum levy and general sales tax. The government is charging higher rate of general sales tax at 31 percent on HSD. It is charging 17 percent GST on other petroleum products. In addition, the government is charging Rs 8 per liter petroleum levy on HSD, Rs 10 per liter on petrol, Rs 6 per liter on light diesel oil (LDO) and Rs 3 per liter on kerosene oil.
On the basis of the prevailing prices in the international market, the Oil and Gas Regulatory Authority had recommended reduction of Rs 5.26 per liter or 6.0 percent in the price of petrol and an increase of Rs 0.65 per liter or 0.7 percent in the price of high speed diesel (HSD). Under the current procedure, oil prices are notified on the last day of every month.
For the last several months, the Ministry of Petroleum and Ogra have been recommending a substantial increase in the prices of kerosene oil and LDO to minimize a huge price differential with petrol. Sources said the government has reduced the prices of petrol after international oil prices fell slightly in March. The sales tax on motor spirit has been increased from 17 percent to 21.5 percent from April, 2018, reflecting an increase of 4.5 percent.
The FBR has issued a notification late Saturday night to revise sales tax rates on some petroleum products with effect from 1st April, 2018. From April 1, 2018, High Speed Diesel (HSD) will be subject to 27.5 percent as compared to 25.5 percent in March 2018. Sales tax on HSD has been increased by 2 percent. Sales tax on kerosene would remain at 17 percent during April 2018. Sales tax on light diesel oil has been decreased from 17 percent to 16.5 percent from April 1, 2018.
Following is the text of the SRO issued here on Saturday: SRO 414(I)/2018: In exercise of the powers conferred by clause (b) of sub-section (2) and sub-section (6) of section 3 of the Sales Tax Act, 1990, the Board with the approval of Federal Minister-in-charge, is pleased to direct that the following further amendment shall be made from the 1st April, 2018, in its Notification No. SRO 57(1)/2016, dated the 29th January, 2016, namely:-
In the aforesaid Notification, for the existing Table, the following shall be substituted, namely:-
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S.No. Description PCT heading Rate
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(1) (2) (3) (4)
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1. Motor spirit excluding HBOC 2710.1210 21.5% ad Valorem
2. High speed diesel oil 2710.1931 27.5% ad Valorem
3. Kerosene 2710.1911 17% ad Valorem
4. Light diesel oil 2710.1921 16.5% ad Valorem
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