Fuel prices can be slashed from Rs 3 to Rs 14 per litre, if government decides to remove Petroleum Levy (PL), Business Recorder has learnt. According to a notification issued by Oil and Gas Regulatory Authority (Ogra), government is charging Rs 10 per litre PL on premium motor gasoline (PMG), Rs 14 per litre on HOBC, Rs 6 per litre on kerosene oil, Rs 3 per litre on Light diesel oil (LDO) and Rs 8 per litre on High Speed Diesel (HSD).
After elimination of PL, the price of PMG can be slashed from Rs 73.14 to Rs 63.14 per litre, HOBC from Rs 87.56 to Rs 73.56 per litre, Kerosene oil from Rs 64.81 to Rs 58.81 per litre and LDO from Rs 62.20 to Rs 59.2 per litre. When contacted in this regard, former Finance Minister Sartaj Aziz, said that government was charging PL to recover money paid to the oil marketing companies (OMCs) on account of subsidy. "It would have been preferable for the government to adjust accumulated circular debt by decreasing non-development expenditures," he said.
Aziz added that the subsidy given to power sector had resulted in a circular debt which also had an impact on the OMCs that were operating by borrowing money from banks to continue their operations. He lamented that some government departments are defaulting on payment of dues and emphasised that it was the responsibility of government to resolve the issue. He further stated that one of the conditions laid down by the International Monetary Fund (IMF), was to eliminate circular debt but the government failed to resolve this issue two years down the line.
Senator Professor Khurshid Ahmed said that PL revenue was not being used to strengthen the energy sector. PL was supposed to be used for the development of oil refineries but on the contrary it is being used to meet revenue shortfall, he added. He maintained that PL was inflationary due to its impact on input cost and such taxes could not be justified. Kurshid said that indirect taxes have invariably contributed to poverty and the government should not resort to them.