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ISLAMABAD:
The government has increased the tax on petrol by Rs 4.65 per liter and on diesel by 80 paisa per litre, effectively depriving the public of full relief from falling fuel prices.
According to a notification issued on January 15 by the Petroleum Division, the duty on petrol has been increased from Rs 79.62 to Rs 84.27 per litre, while the duty on diesel has been raised from Rs 75.41 to Rs 76.21 per litre.
The petroleum tax on kerosene has been increased by Rs 1.41 per litre, raising it from Rs 18.95 to Rs 20.36 per litre. The duty on light diesel has been fixed at Rs 15.84. per litres.
The petroleum tax is a government-imposed tax on petroleum products such as gasoline, high-speed diesel, kerosene and heating oil. It is levied per liter and collected by the Federal Government under the Petroleum Levy Ordinance, 1961.
The tax is not a VAT; it is a fixed fee per liters, which the state can raise or lower through reviews.
Whatever the government collects through the oil tax goes directly to the federal treasury, unlike sales tax, which is shared with the provinces.
The petroleum tax is a major source of revenue, especially when the government wants to avoid increasing general taxes.
