Local refineries have charged an estimated amount of Rs 290 billion from consumers in last 15 years under the head of deemed duty - a financial support and protection of refineries. This was told to the Senate Standing Committee on Petroleum on Tuesday, which met here in the chair of Senator Mohsin Aziz.
An official of Petroleum Division informed the committee that govt of Shaukat approved the deemed duty at the rate of 7.5 percent on indigenous high speed diesel as financial support and protection of refineries in 2003-04 for an indefinite period. Chairman Committee Mohsin Aziz asked the refineries' representatives to abolish the duty illegally charged from the consumers or at least fix a validity period of the duty.
Representatives of five refineries opposed the committee's recommendations regarding withdrawal of deemed duty. They argued that the government is giving relaxation and subsidies to every sector. The deemed duty should not be withdrawn until petroleum prices are deregulated.
The ministry told the committee that draft of the new Oil Refinery Policy will be shared with the committee after Eid and it will also include a detailed briefing on this matter.
A briefing on the reintroduction of 80-82 Ron petrol, especially for Motorcycle commuters for provision of relief in price to them, was also given. The 80-82 Ron petrol will be Rs 10-12 cheaper than the 90-92 Ron petrol, which is currently in use. The Member Oil and Gas Regulatory Authority (OGRA) gave a briefing on the reintroduction of 80-82 RON petrol for motorcycles which consume 45 percent of petrol. The proposal was prepared in consultation with UET Lahore and other experts, he said.
OGRA chairperson Uzma Adil made it clear in the meeting that the proposal has been floated in personal capacity and does not have ownership or blessing of OGRA. She further warned the Member if he would not withdraw the proposal, he should withdraw himself from the post of Member Oil OGRA. Stakeholders of the motorcycle industry, oil refineries and PSO also attended the meeting and expressed reservations on changing from 92 to 82 Ron.
The matter was referred to the Ministry of Energy and Petroleum Division to invite stakeholders and work on the feasibility of the proposal. The committee was told regarding the matter of reconciliation of petroleum development levy by PSO and it was told that the levy is already reconciled and the PSO has deposited it.