Nominal cut in POL products' prices

Federal government has reduced the prices of all petroleum products in line with the recommendations of the Oil & Gas Regulatory Authority (Ogra) for December following lower international market rates.

In a statement, Ministry of Finance stated Saturday that the government has decided Rs2.40 per litre decrease in the rate of high speed diesel (HSD), 25 paisa per liter in petrol, 83 paisa in kerosene and Rs2.90 for light diesel oil (LDO) for December.

Oil and gas regulator moved a summary on Friday to the Ministry of Finance containing calculations on petroleum prices on the basis of existing rates of general sales tax and petroleum levy.

New ex-depot rate of HSD has been set at Rs125.01 per litre instead of Rs127.41, showing a reduction of 1.9 percent. Likewise, petrol price has gone down to Rs113.99 per litre from Rs114.24, down 0.2 percent.

The new prices of petroleum will be applicable from December 1 till December 31.

The ex-depot price of LDO has been fixed at Rs82.43 per litre instead of Rs85.33 per litre, showing a decrease of 3.4 percent while rate of kerosene oil has declined by 0.9 percent to Rs96.35 per litre from Rs97.18.

The government has already increased general sales tax on all petroleum products to a standard rate of 17 percent across-the-board to generate additional revenues. Besides the 17 percent GST, the government has more than doubled the rate of petroleum levy on HSD in recent months to Rs18 per litre instead of Rs8, while levy on petrol has been raised to Rs15per litre, up from Rs10. The petroleum levy on kerosene oil and LDO remains unchanged at Rs6 and Rs3 per litre, respectively.

Sources said that the Federal Board of Revenue (FBR) maintained the rate of General Sale Tax (GST) at 17 percent on all POL products. The standard rate of 17 percent sales tax would be applicable on all POL products during December 2019. However, the FBR did not issue notification on the revision of sales tax on POL products till late night. When asked about the revenue impact, the FBR officials said that the revenue collection from petroleum sector would not decrease during December 2019, as the rate of sales tax has not been changed on POL products.