Ogra summary rejected, POL prices reduced by Rs5 only

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Ogra summary rejected, POL prices reduced by Rs5 only

ISLAMABAD: Despite a 40-50 percent decrease in oil prices in the international market, the government did not pass on the benefit to the consumers as the summary forwarded by the Oil and Gas Regulatory Authority (Ogra) to the Ministry of Finance recommending a reduction of 10 percent in the price of petroleum products was rejected.

In the summary, Ogra recommended a decrease in the price of petrol by Rs7.56, high speed diesel and high octane by Rs10.15 whereas kerosene by Rs8.17 from February 1.

In case the summary was approved by the prime minister, light diesel would seed a price-cut of Rs7.36.

However, Prime Minister Nawaz Sharif announced a reduction in POL prices by Rs5 per litre on all categories of petroleum products including petrol and diesel.

The POL prices in the international market have touched the lowest ebb in recent months and the government was avoiding passing on the full benefits giving the argument that it was creating a buffer to avoid a sudden surge in prices. “All regional countries including India are using the fiscal side to maintain balance in oil prices,” said the sources.

Moreover, the government brought changes in the mechanism for the imposition of General Sales Tax (GST) on petroleum products and slapped a fixed amount in rupee terms on per litre for all products.

The new tax rate will become effective from Feb 1, 2016. The direct sales tax shall be imposed at the import stage of POL products.

Earlier, the FBR used to impose GST in terms of percentage on a per litre basis. Now the tax rate has increased for all POL products and GST has been imposed in a fixed rupee term.

According to a notification issued by the FBR, the government imposed Rs14.48 per litre GST on motor spirit excluding HOBC. On HOBC, the imposed GST stands at Rs18.57 per litre.

On kerosene, the government imposed GST at the rate of Rs10.40 per litre. On High Speed Diesel, the imposed GST now stands at Rs29.57 per litre. On light diesel oil, the GST was slapped at the rate of Rs9.63 per litre with effect from February 1, 2016.

The FBR is facing a setback on account of reduction in oil prices having far-reaching negative consequencies on its revenue collection target of Rs3,104 billion for the current fiscal year.

The enhanced GST will yield additional revenues in the current fiscal year thus helping the FBR inch towards the desired tax collection target for the current financial year.—Published in The News

Ogra summary rejected, POL prices reduced by Rs5 only was posted in business of Geo TV - https://www.geo.tv on January 31, 2016 and was last updated on January 31, 2016. This news story is related to Pm, Announces, Rs5, Litre, Cut, Pol, Prices. Permanent link to the news story "Ogra summary rejected, POL prices reduced by Rs5 only" is https://www.geo.tv/latest/100720-PM-announces-Rs5-per-litre-cut-in-POL-prices.