The prices of lubricants have shot up by Rs 5000-7000 per tonne to all time high level of Rs 157,000 per tonne due to imposition of one percent special excise duty in the Federal budget, dealers told Business Recorder on Thursday. Since the last few weeks, the market was witnessing the impact of budget as the trend of hike in the prices of different products was continuing.
Starting with sharp rise in the price of steel products, now the prices of lubricants have gone up. Dealers said the Federal government had imposed a new tax in the shape of one-percent special excise duty on lubricants, despite of the fact that the industry was already paying 10 percent excise duty.
"The government has also made some changes in the tax collection and one percent newly imposed excise duty will be levied on the total value of product after imposition of all taxes," they added.
In addition, the government had reduced 10 percent sales tax input from 100 percent to 90 percent, which was the major reason of rise in the lubricant prices. Dealers said that after the changes in the taxes, lubricant manufacturers raised over all three to five percent or Rs 5, 000-Rs 7, 000 per tonne prices.
Prices of all kind of lubricants, including spinning oil, hydraulic oil and motor oil, which are basic requirement of motor cars, bikes, transport, textile industry and locomotive, had shot up.
The prices of two-stroke oil, mainly used in motor bikes, have surged up by Rs 5,000 per tonne to Rs 105,000 per tonne previously being sold at Rs 100,000 per tonne in the domestic market. Per litter price of the two-stroke oil has increased by rupees five per litre to Rs 105 per litre, earlier being tagged at Rs 100 per litre in the domestic market.
The best quality lubricant prices have mounted by Rs 7,000 per tonne to all time high level of Rs 157,000 per tonne in the domestic market, as previously it stood at Rs 150,000 per tonne. Similarly, the prices of hydraulic oil reached Rs 115,000 per tonne from Rs 110,000 per tonne in the local market, depicting an increase of Rs 5,000 per tonne.
"All lubricant companies have increased the prices of oil, of which some have raised while some will do it within the next few days," said Chairman of all Pakistan Lubricants Manufacturers Association (APLMA) Mian Zahid Hussain.
He said that leading branded lubricant prices were higher than the prevailing rates and after this upsurge, the 0.75 litre oil can for motor bike would reach Rs 140-150 from Rs 130-140.
"If the government withdraws 11 percent excise duty imposed on lubricants, then its prices will reduce by Rs 15 per litre," he added. Presently, the country''s overall lubricants demand stood at 400,000 tonne annually, of which around 200,000 tonne was being produced in the country, while around 50,000-60,000 tonne was being imported from different countries, he said. He said that smuggled lubricants had also a huge share in the local market, which stood at around 60,000 tonnes.