The government is likely to increase the price of petroleum products up to Rs 4.80 per litre in line with the rise in global oil prices and the decline in the external rupee value, effective from September 1. According to sources, in a summary moved to Prime Minister Syed Yousuf Raza Gilani.
The Petroleum Ministry has proposed to raise price of petrol (motor spirit) by Rs 4.80 per litre ; HOBC Rs 3.38 per litre; kerosene oil Rs 2.69 per litre; and light diesel oil (LDO) Rs 3.69 per litre. The Prime Minister will approve or reject the summary on Monday. After the proposed increase in the prices of petroleum products, the new price of petrol will be Rs 65.44 per litre, HOBC Rs 80.39 per litre, kerosene oil Rs 60.6 per litre and LDO Rs 56.96 per litre.
The Petroleum Ministry recommended a price rise, based on average crude oil price of 71.23 dollars per barrel in the international market during the current month. The Finance Ministry has also backed the Petroleum Ministry''s proposals in a bid to enhance revenue collection during the current financial year.
"If the government does not increase oil prices in line with the hike in global oil prices, it would be forced to adjust the differential in Petroleum Levy which would reduce revenue from this source," sources said. After the recent proposed increase in the prices of petroleum products becomes effective, the government is expected to collect Petroleum Levy (PL), amounting to rupees eight billion during September.
The government, according to provisional estimates, collected rupees eight billion PL during the current month. The government is currently charging Rs 11.39 per litre PL on petrol; Rs 16.40 per litre on HOBC; rupees six per litre on kerosene oil; and rupees three per litre PL on LDO. This collection is in addition to imposition of Rs 8.34 per litre general sales tax (GST) on petrol; Rs 10.62 per litre on HOBC; Rs 7.99 per litre on kerosene oil; and Rs 7.35 per litre GST on LDO.
With the proposed increase in oil prices, the government would continue the current PL, a non-tax receipt. However, the GST collection will increase after hike in prices of petroleum products, said the sources. The government had reduced oil prices beginning of the current month in line with reduction of global oil prices.
It had reduced prices of motor spirit, HOBC, kerosene oil and light diesel oil (LDO) by Rs 1.67 per litre; Rs 1.77 per litre; Rs 1.44 per litre; and Rs 1.67 per litre respectively. Even after reduction in oil prices, the government collected rupees eight billion in PL during the current month. Budget estimates of collections through "Carbon Tax", renamed PL, was Rs 122 billion. During the last financial year, the government collected Rs 118 billion petroleum development levy (PDL) on petroleum products.