Pakistan: PML-N Ripping Off POL Consumers – OpEd
Reviewing the performance of Pakistan’s Oil & Gas Regulatory Authority (OGRA) one point has been made very clear that it is neither an autonomous nor has any authority whatsoever. The purpose of creation of this authority was to protect the interest of all the stakeholders. However, the track record proves that it has been protecting the interest of one stakeholder, the Government of Pakistan (GoP).
One need not make any attempt to peep through the history; the latest decision of the GoP is enough to say that that OGRA is subservient to Ministry of Finance. The Ministry headed by Senator Ishaq Dar has one mandate only, extorting money in the form of all sorts of taxes to finance lavish spending of the ruling elite.
OGRA had recommended on Friday reduction of up to 21 per cent in prices of petroleum products for the month of February, based on existing tax rates. In a summary sent to the government, the Authority recommended the following reduction motor gasoline (10%), HSD (13.6%), kerosene oil (20.38%), LDO (19.6%) and HOBC (14.4%) provided the GoP wanted the current tax rates to continue.
An official said the prices could be brought down by up to 50% if the general sales tax rate was reverted to the normal 17%. However, Senator Ishaq Dar wanted to recover the potential loss in revenue resulting from reduction in international prices of crude oil/POL and insisted on maintaining GST rates of up to 47% on some of the fast moving products.
According to a news item published in Dawn newspaper motor gasoline and HSD are the two products that generate most of the revenue for the government. The aggregate monthly sale of HSD is 600,000 tons, motor gasoline 400,000 tons, kerosene less than 10,000 tons and HOBC less than 6,000 tons.
As against the above stated scenario the GoP has announced ridiculously little per litre reduction in prices. Motor gasoline will be available at Rs71.25 and HDS at Rs75.79. Instead of passing on full benefit to the consumer of reduced oil prices in the international market, the government decided to amend the sales tax collection mechanism.
The government will still bag Rs25 in terms of taxes and levies on every litre of petrol. According to the notification, a fixed sales tax of Rs14.58 per litre has been imposed on petrol. Earlier the rate was 20 per cent of the petrol price, or Rs10-12 per litre. Similarly, the government has fixed the sales tax at Rs29.57 per litre on HSD, earlier it was 34pc, or around Rs12-15 per litre. The government will now receive Rs38 per litre on HSD in terms of taxes and levies. Sates tax of Rs18.57 per litre has been imposed on HOBC, Rs10.40 on kerosene and Rs9.63 per litre on light diesel oil (LDO) in the amended notification.
