New POL taxes may burden masses with Rs25bn

ISLAMABAD: The federal government has almost made a ‘record increase’ in the ratio of taxes imposed on the petroleum products, which in result has added additional burden of approximately Rs25 billion per month on the masses who are already burdened with inflation and multiple taxes.

Sources said the government actually hadn’t provided any relief to the masses in recently announced cut in per litre prices of petroleum products if the reduction was to be compared with a decline in global oil prices.

They said the government had reduced per litre prices of petroleum products by Rs 5 instead of Rs 15/litre, adding the government had fixed petroleum levy (PL) on high speed diesel at Rs25 per litre, which had failed to provide relief to the masses.

Levy on petrol had been increased by Rs3.5 per litre. If the taxes weren’t increased, petrol price could have witnessed a decrease of Rs 9 per litre. Likewise, instead of providing full relief to people in line with a decrease in global oil prices—which amounts to Rs13 per litre— the government had imposed an additional tax of Rs6 per litre on kerosene oil.

Furthermore, the government was likely to earn Rs60 billion per month from various sorts of taxes already imposed on petroleum products, sources added.

The sources further said the government had increased taxes on petroleum products ostensibly to meet the demand of the International Monetary Funds (IMF).

They said Prime Minister Imran Khan had earlier advised his team to provide up to Rs 15 per litre relief in the prices of petroleum products.

However, Adviser to the PM on Finance Hafeez Sheikh managed to convince the premier to increase the taxes on petroleum products and avoid ‘mini budget’, besides $450 million dollar tranche from IMF.

The PL on HSD was never imposed above Rs 8 per litre in the country's history, sources said.