Gasoline increase. Photo: archive
ISLAMABAD:
The government is likely to reduce prices of petroleum products in line with the fluctuation in global oil prices, starting December 1.
The latest projections show lower ex-refinery and ex-depot rates on the main products.
The price of petrol may drop by Rs 3.70 per liter, high speed diesel (HSD) by Rs 4.28 per liter, kerosene by Rs 0.73 per liter and light diesel (LDO) by Rs 6.35 per liter.
Petrol is expected to decline to Rs 261.75 per liter from Rs 265.45, registering a reduction of Rs 3.70 per litre.
The oil industry has forecast a reduction in high-speed diesel prices, which could come down to Rs 280.16 as against Rs 284.44, registering a reduction of Rs 4.28 per litre.
Kerosene oil price is expected to decline to Rs 193.61, slightly down from Rs 194.34. Similarly, light diesel may see a drop to Rs 164.45 from the current price of Rs 170.80.
High-speed diesel is widely used in the transportation and agriculture sectors. Therefore, a reduction in its price will have a great impact on people’s lives.
Gasoline is used in motorcycles and cars, and the province of Punjab is its main consumer due to the ban on the use of indigenous gas in CNG stations.
Kerosene oil is used for cooking mainly in the northern part of the country where LPG is not available. Pakistan Army is its key user as light diesel is used in industry.
Currently, the government charges a higher tax rate, which includes petroleum tax (PL). Consumers currently pay Rs 75.41 per liter of petroleum (PL) and Rs 2.50 per liter CSL for high-speed diesel.
Consumers also pay a tax of Rs 97.62 per liter on petroleum (PL) and Rs 2.50 per liter CSL on petrol. There is no sales tax on these products.
The federal government had increased the oil tax rate to pocket all the tax revenue on petroleum products. The sales tax collection is shifted to the provinces and therefore the government had reduced the sales tax to zero to deprive the provinces of sales tax collection.
The oil tax was also to invest in the development of the oil sector, such as the construction of oil deposits in the country. However, governments have been using the revenue to cover their current expenses.
