SC asks govt to reevaluate process of levying taxes on POL products

The Chairmen of Oil and Gas Regulatory Authority (Ogra), Federal Board of Revenue (FBR) and MD Pakistani State Oil (PSO) were instructed to provide reports about a fresh formula for the correct fixing of prices for POL products in a span of ten days

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ISLAMABAD: The Supreme Court on Friday instructed the relevant officials to reevaluate the process for levying taxes on petroleum products and devise a plan to decrease them.

Mian Saqib Nisar, Chief Justice of Pakistan (CJP) was presiding over a three-member bench which was conducting a hearing of the suo motu proceedings regarding the imposition of several taxes on oil and gasoline products at the SC’s Karachi registry on Friday, reported Dawn.

The Chairmen of Oil and Gas Regulatory Authority (Ogra), Federal Board of Revenue (FBR) and MD Pakistani State Oil (PSO) were instructed to provide reports about a fresh formula for the correct fixing of prices for POL products in a span of ten days.

Although CJP noted some documents had been provided and relevant officials had explained the SC regarding the procedure of levying taxes on petroleum products, however, he added a few dark areas still required explanation.

The Ogra chairperson Uzma Adeel’s absence was noted by CJP during the hearing and directed profiles, credentials, selection criteria for FBR Chairman, PSO MD and Ogra chief be presented to the apex court in the next hearing.

PSO MD Shaikh Imranul Haque at the start of the proceedings apprised the SC in February three companies had delivered raw petroleum and its landing/imported cost of petrol was Rs52.23 per litre.

He provided the apex court with formula surcharges and taxes on POL products and asserted tendering process was being carried out in a transparent manner.

Mr Haque told the SC besides PSO, there were 20 other oil marketing companies (OMCs) in Pakistan.

CJP asked Mr Haque if he was aware of regional prices of petrol to which he replied in the affirmative.

When queried regarding the difference of imported price of petroleum products in other regional countries, Mr Haque replied a difference over premium could be present but was unable to explain it.

CJP Saqib Nasir stated the bench would designate a team of experts to scrutinize these statistics and cautioned the court would not spare any individual in case of any loophole being discovered.

Furthermore, the PSO MD was asked by CJP to provide an explanation as to why inland freight equalization margin (IFEM) was being levied in Karachi or other areas where these products landed directly.

To this, Mr Haque responded it was the government’s policy and the bench had serious indignation over the 3.16 percent commission being doled out to the dealers.

The bench added there were ambiguities in issues of the dealership because influential people in connivance with the relevant official were running fuel stations.

Mr Haq responded this was the domain of Ogra.

And the in-charge of finance at Ogra replied it was following the federal government’s decrees and were only levying it as instructed.

And CJP queried the official about the government’s approval in this regard, he told the court they were getting approvals on a yearly basis.

But, the official failed to provide anything when the CJP queried regarding presenting the approval of the government.

Arif Ahmed Khan, Finance Secretary apprised the bench the interim government had levied only 50 percent deficit on POL products.

When the CJP queried about further price rises in petroleum products, Mr Khan said it would happen.