Petroleum levy raised to unprecedented levels

ISLAMABAD: The government has imposed an unprecedented increase in taxes and levy on petroleum products for the month of May 2020.

As per details, the government has raised petroleum levy (PL) on the price of petrol from Rs17.16 per litre in April to Rs23.76 per litre in May. Similarly, the government has increased the PL on high-speed diesel by Rs14.51 per litre to Rs30 per litre.

At present, on the per-litre price of high-speed diesel, the government is charging Rs11.64 in sales tax, Rs2.81 as margin for oil marketing companies, Rs3.12 as margin for dealers and Rs1.54 as margin under the head 'Inland Freight Equalization' (IFEM).

Similarly, for petrol, it was charging Rs11.85 in sale tax, Rs2.81 in OMCs' margin, Rs3.70 as dealer's margin and Rs3.73 under IFEM.

The government also increased the ratio of PL in the price of kerosene oil by Rs2.18 per litre, while the same on light diesel oil as hiked to Rs11.18 per litre.

According to a notification issued by the Petroleum Division, "PL on the sale of motor gasoline through retail outlet is Rs23.76 per litre while for direct sale of motor gasoline, it is Rs27.46 per litre. Likewise, PL for sales of high octane blended component (HOBC) through retail outlet is Rs14 per litre and for direct sale, it is Rs16.15. PL for sale of kerosene oil through retail outlet is Rs18.02 per litre while the same for direct sale is also Rs18.02 per litre. Moreover, PL for sale of HSD is Rs30 per litre through retail outlet and Rs33.12 per litre for direct sale.

"Furthermore, PL on the sale of LDO through retail outlet is Rs11.18 per litre and for direct sale, it is Rs11.18; while PL for the sale of E-10 Gasoline through retail outlet is Rs21.18/litre and for direct sale, it is Rs24.18/litre."

According to sources, the purchase price of per litre petrol is Rs35.73 while new price of petrol is set at Rs81.58 per litre. On the other hand, the purchase price of HSD is Rs30.99 per litre while the sale price is set at Rs80.10.

They said that the government has made unprecedented increase in the ratio of tax, duty and PL ostensibly to earn billion of rupees in revenue. By jacking up the ratio of taxes, duties and PLs, the government has deprived the consumers of relief from the recent plunge in global oil prices, they added.