Govt likely to increase petroleum levy to boost revenue

APCNGA demands end to sales tax hike, customs duty, freezing of gas price

The government is expected to gradually increase petroleum levy on petrol and other petroleum products to improve revenue collection as targeted under the 2021-22 federal budget and IMF programme.

According to a report by Dawn, the move would help widen a gap between compressed natural gas (CNG) and petrol prices and may contain import bill.

The report added that the government had set a Rs610bn target of petroleum levy during the current fiscal year but could actually collect no more than Rs25bn in first two and half months of the first quarter.

Meanwhile, Finance Minister Shaukat Tarin constituted a committee comprising chairmen FBR and OGRA, representatives of Petroleum Division and All Pakistan CNG Association (APCNGA) to workout options and furnish recommendations regarding reduction in taxes and improving the gas supply.

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According to details, a delegation of All Pakistan CNG Association had a meeting with Tarin to explain the challenges being faced by the CNG sector, at present, due to massive fluctuations in the international prices of LNG along with rupee depreciation.

“The surging prices of CNG have undermined its attraction as a fuel of choice for the local consumers,” APCNGA Chairman Khalid Latif said while presenting a comparative analysis between retail prices of CNG and petrol.

The finance minister said that the government is trying to reform and liberalise the gas sector so that it can develop rapidly.

Following the meeting, APCNGA leader Ghiyas Paracha said increased import of gas will help the government save $350 to $700 million in two years. He said that he had briefed the finance minister about the problems and suggested long-term and short-term solutions including freezing prices of RLNG for the CNG stations on the level of August-March and a 12 per cent increase in sales tax should be reversed.

“We have also demanded abolishing customs duty on gas imports, he said, adding that gas consumption shows that imports will have to be doubled from 100 Million Cubic Feet per Day (MMCFD) to 200 MMCFD.

The delegation also demanded reduction in sales tax and customs duties on import of LNG by the CNG sector because it was the only sector that was paying the full import price along with taxes while all other sectors were paying subsidized gas and LNG rates.

 

 

 

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