Rush for gasoline. Photo: file
ISLAMABAD:
The government is expected to reduce prices of petroleum products based on fluctuations in global oil prices, starting December 1.
The latest projections show lower non-refinery and non-depot rates for key products.
The price of petrol may drop by Rs 3.70 per litre, high speed diesel (HSD) by Rs 4.28 per litre, kerosene by Rs 0.73 per liter and light duty diesel (LDO) by Rs 6.35 per litre.
Petrol is expected to drop to Rs 261.75 per liter from Rs 265.45, registering a reduction of Rs 3.70 per litre.
The oil industry has predicted a reduction in high-speed diesel prices, which may come down to Rs 280.16 from Rs 284.44, registering a reduction of Rs 4.28 per litre.
The price of kerosene is expected to fall to Rs193.61, down slightly from Rs194.34. Similarly, light diesel could see a decline to Rs164.45 from the current price of Rs170.80.
High-speed diesel is widely used in 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 Punjab province is the largest user due to the ban on the use of local gasoline at CNG stations.
Kerosene oil is used for cooking mainly in the northern part of the country, where LPG is not available. The Pakistan Army is the main user, as light diesel is used in industry.
The government currently imposes a higher tax rate, which includes the petroleum tax (PL). Consumers currently pay Rs 75.41 per liter petroleum cess (PL) and Rs 2.50 per liter CSL for high-speed diesel.
Consumers also pay Rs 97.62 per liter petroleum tax (PL) and Rs 2.50 per liter CSL on petrol. There is no sales tax on these products.
The federal government had increased the levy rate on petroleum to pocket the entire tax on petroleum products. The collection of sales tax is transferred to the provinces and therefore the government has reduced the sales tax to zero to deprive the provinces of the collection of sales tax.
The oil tax was also supposed to invest in the development of the oil sector, such as the construction of oil storages in the country. However, governments used this collection to meet their current expenses.
