ISLAMABAD: Prime Minister Imran Khan, while approving up to Rs25.58 per litre hike in prices of petroleum products (POL) last month, had refrained from considering a reduction in the rate of petroleum levy imposed on the per litre price of POL products.
These revelations were found in a summary of the Finance Division.
According to sources, Pakistan State Oil had projected Rs31.58 per litre increase in the price of motor spirit (MS) and Rs24.31 per litre hike in high-speed diesel (HSD) for the month of July. However, the Finance Division proposed the PM to provide relief to public by slashing the price by Rs6 per litre for MS and Rs3 per litre for HSD either by reducing the rate of petroleum levy, which was already touching the maximum level of Rs30 per litre, or by implementing the proposed increase for 36 days (five days of June and 31 days of July) in the country.
The Petroleum Division had also proposed that the change in prices of petroleum products be made immediately effective from 26 June 2020, instead of the usual practice of announcing the change on the last day of the month.
Based on the above information, the PM made the increase in prices of POL products effective from June 26, and did consider reducing the rate of petroleum levy, said sources.
By making the prices effective from June 26, the government would earn an additional revenue of Rs26 billion.
Sources said the Petroleum Division had explained to the Finance Division that the proposed increase for 36 days period will, however, have a slight negative impact on oil marketing companies (OMCs) and refineries as they would recover less revenue in July 2020 and more revenue in remaining five days of June 2020.