Gasoline rush. Photo: file
ISLAMABAD:
The government is likely to lower the prices of petroleum products in line with fluctuations in global oil prices, with effect from December 1.
The latest projections show lower prices ex-refinery and ex-depot across major products.
Petrol price may decrease by Rs 3.70 per litre, High Speed Diesel (HSD) Rs 4.28 per litre, Kerosene oil Rs 0.73 per liter and Light Diesel Oil (LDO) Rs 6.35 per litre.
Petrol is expected to fall to Rs 261.75. per liter from Rs.265.45, registering a reduction of Rs.3.70.
The oil industry has predicted a drop in high-speed diesel prices, which may come down to Rs 280.16 as compared to Rs 284.44, registering a reduction of Rs 4.28 per litre.
The price of kerosene is expected to fall to Rs193.61, slightly down from Rs194.34. Similarly, the light diesel may see a drop to Rs 164.45 from the existing price of Rs 170.80.
High-speed diesel is widely used in the transport and agricultural sectors. Therefore, a reduction in the price will have a big impact on people’s lives.
Gasoline is used in motorcycles and cars and Punjab province is its key user due to the ban on the use of indigenous gas in CNG stations.
Petroleum oil is used for cooking mainly in the northern part of the country where LPG is not available. The Pakistan Army is its key user as light diesel oil is used in industry.
The government currently levies a higher tax rate which includes the Petroleum Levy (PL). Consumers currently pay Rs75.41 per liter Petroleum Levy (PL) and Rs2.50 per liter CSL on high-speed diesel.
Consumers also pay Rs97.62 per liter petroleum tax (PL) and Rs2.50 per liter CSL on petrol. There is no VAT on these products.
The federal government had increased the rate of petroleum taxes to collect the entire tax collection on petroleum products. The sales tax collection is shifting to provinces and hence the government had reduced the sales tax to zero to deprive the provinces of VAT collection.
The petroleum tax was also supposed to invest in the development of the oil sector, such as building oil storage in the country. However, the governments have used the collection to cover their current expenses.
