ISLAMABAD: The bureaucracy sitting at the Finance Ministry and the Federal Board of Revenue (FBR) compelled the caretaker Prime Minister to increase the prices of petroleum on the last day of June, it has been learnt reliably.
Sources close to this development revealed that the incumbent Finance Minister (FM) informed the cabinet that if government did not increase POL prices, the already worrying financial position of the country can further deteriorate as the country foreign reserves are dwindling. In addition to this, the tax machinery failed to achieve the revised revenue target due to unnecessary tax exemptions given by the FM of former PM Shahid Khaqan Abbasi.
The tax officials had informed the FM before the cabinet meeting that the department is already facing a revenue shortfall.
“The tax department could not collect the tax from the telecommunication companies in 15 days as court has barred moreover officials stated that if we will not pass the burden on masses than revenue collection be affect”.
The caretaker government had increased the petroleum price in June 2018 and jacked up oil prices by Rs5 to Rs14 per litre for July further burdening the already economically suffocated general public.
Sources said that the FBR will collect around Rs100 billion from the masses in July 2018 on account of various taxes including the Inland Freight Equalization Margin (IFEM), companies, and dealers margins etc.
The increase in GST from 24 per cent to 31 per cent has resulted in the Rs14/liter hike instead of 8/litre raise in the price of HSD, though the government has already been collecting a variety of taxes including the 13 per cent regulatory duty on diesel (HSD) and 5 per cent customs duty on petrol.
The caretaker government will fetch Rs42 billion under the head General Sales Tax (GST), Rs17 billion on account of petroleum levy, while Rs8 billion in the name of customs duty, and Rs5 billion under the head deemed ‘duty’ from the masses Also, Rs20 billion is to be collected from the public to benefit oil marketing companies (OMCs).
The outgoing government Pakistan Muslim League Nawaz (PMLN) had put the decision on the shoulders of caretaker government regarding to increase the petroleum prices as Dr Shamshad Akhtar had stated in her first interaction with media that the government will increase the petrol princes as it has been linked with the international market.
It is pertinent to mention here that the Oil and Gas Regulatory Authority (OGRA) had proposed an increase in the prices of petrol by Rs7.55 per litre, diesel by Rs14 per litre, kerosene oil by Rs3.36 per litre and light diesel oil by Rs5.92 per litre and the government approved a massive hike in the prices of POL products and set the new price of motor spirit 92 RON petrol at Rs99.5 per litre, high-speed diesel Rs119.31 and kerosene oil and light diesel oil at Rs87.7 and Rs80.9, respectively.
