How Government Will Bear Loss By Unchanged Fuel Prices?
To provide relief to the people during Ramazan, the government has kept the fuel prices unchanged from May 1 to May 15
By keeping the fuel prices unchanged for the next 15 days, the government is all set to bear loss of Rs 4.80 billion.
To provide relief to public during Ramazan, the government has kept the fuel prices unchanged from May 1 to May 15 but the measure will come at a heavy loss.
The eid-holidays-cum-lockdown in the country from May 8 to May 15 will result in a massive dip in fuel consumption. The large and big industries, mills, and transport would remain shut during the period.
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Kerosene oil is used in the construction industry while light diesel is highly consumed in running tube wells. However, due to highly restrictive eid holidays, the construction sector would not function while tube-wells would also run less than usual capacity.
Suggestions turned down
Finance ministry officials told News360 that relief of Rs 4.80 billion in the prices of petroleum products has been given keeping in view the usual consumption of oil and diesel.
The officials told Oil and Gas Regulatory Authority (OGRA) had recommended Rs 5.57 per liter increase in the petrol prices while Rs 4.18 per liter in high-speed diesel prices.
If it was approved, the petrol price would have gone up to Rs 114.63 per liter and diesel price to Rs 114.95 per liter.
OGRA had also suggested an increase of Rs 5.19 per liter of Kerosene oil that would have taken its price to Rs 85.19 liter.
Similarly, an increase of Rs 10.64 per liter for light diesel was also recommended after which its price would have jumped to Rs 88.29 per liter.
Govt charging heavy levy
The tax revenue is shared between the federal government and provinces through the national finance commission (NFC) award.
However, the levy is a kind of tax that is collected exclusively by the federal government and it is exempted from NFC.
The government enjoys legal cover from the parliament to impose a levy of up to Rs 30 which is fluctuated to bring change in the petroleum prices.
Currently, the government is collecting Rs 11.23 per liter levy on petrol while Rs 15.29 per liter on high-speed diesel.
Besides this, the government is charging 17% general sales tax and Rs 3.35 per litre custom duty on imported crude oil.
