Karachi, July 7, 2024 – Pakistan’s petroleum dealers have successfully convinced the government to reverse a new tax regulation after arguing it amounted to double taxation.
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Divided Dealers Cause Partial Petrol Pump Closure
Karachi, July 5, 2024 – Pakistan witnessed a patchy petrol pump strike on Friday as the Pakistan Petroleum Dealers Association (PPDA) remained split over a call to protest a new 0.5% turnover tax imposed in the recent federal budget.
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Bonded Warehouse Policy Introduced to Address Petroleum Sector Issues: Musadik Malik
Islamabad: In a bid to tackle the persistent dry outs in the petroleum sector, the government of Pakistan has unveiled a new policy known as the “bonded warehouse.”
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Daily petroleum prices in Pakistan for May 2023
Following the last update on May 1, the daily petroleum prices in Pakistan for May 2023 have remained unchanged, offering stability to consumers. The current prices will be effective until May 15, 2023.
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Pakistan may impose petroleum tax to avert revenue shortfall
ISLAMABAD: Pakistan likely to impose tax on petroleum products to avert imminent shortfall in revenue collection.
Reports suggested that the Federal Board of Revenue (FBR) – the apex tax collecting agency of the country – is anticipating massive revenue shortfall in coming months due to no tax on petroleum products besides slowdown in economic activity.
Reportedly, the FBR may face about Rs500 billion as shortfall in the current fiscal year.
After the first quarter (July – September) 2022/2023, the FBR claimed to present extraordinary performance in revenue collection. “This performance in revenue collection is despite zero rating of Sales Tax on POL products, import compression and the prevailing situation of floods,” the FBR said in a press release.
READ MORE: Petroleum prices in Pakistan for next 10 days; what next?
Experts believed that the imposition of sales tax on petroleum products would increase the retail prices as well as result in high inflation.
At present the prices of petroleum products till November 30, 2022 are: price of petrol is Rs224.80 per liter; high speed diesel Rs235.30 per liter; kerosene oil Rs191.83; and light diesel oil Rs186.50 per liter.
In the latest review on November 15, 2022 the government decided to keep the prices unchanged for the fortnight ending November 30, 2022.
It was third straight announcement to keep the prices of petroleum products unchanged. Previously, on September 30, 2022 the government made changes in petroleum prices.
Experts said that the rise in petroleum prices were imminent in the next review as the government was under immense pressure from the IMF to impose sales tax on petroleum products.
At present the government adopted a policy to keep zero sales tax on petroleum products instead flat rate of 17 per cent. Furthermore, the government also committed to apply petroleum levy to generate more revenue for curtailing budget deficit.
READ MORE: Petroleum prices in Pakistan for next fortnight effective from November 16, 2022
Besides, the exchange rate is again showing a deterioration in rupee value against the dollar. The US dollar continued to make gain for seventh straight session against the Pakistani Rupee (PKR) on November 25, 2022 and reached PKR 223.94 in the interbank foreign exchange market.
The latest import data showed that the petroleum prices were on the higher sides as the country spent more money for import of lesser quantity of petroleum products.
The imports of petroleum products recorded a decline 1.75 per cent to $2.84 billion during July – October of fiscal year 2022/2023 as compared with $2.89 billion in the corresponding period of the last fiscal year.
However, import of petroleum crude recorded an increase of 6.61 per cent to $1.73 billion during the period under review as compared with $1.62 billion in the corresponding period of the last fiscal year.
Interestingly, quantities of both the segments fell 34.43 per cent and 23.26 per cent during the first four months of the current fiscal year, showing surge in prices of the international prices.
Although the present government has kept the prices during last three review under political pressure. But considering the present scenario of fiscal deficit and IMF pressure the government may take tough decision in coming days.
READ MORE: Petroleum prices in Pakistan effective from November 01, 2022
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Mari Petroleum declares Rs33 billion as annual profit for FY22
KARACHI: Mari Petroleum Company Limited (MPCL) on Thursday declared over Rs33 billion after tax profit for the fiscal year 2021/2022.
According to annual financial results submitted to the Pakistan Stock Exchange (PSX), the net profit of the company increased by 5.15 per cent when compared with Rs31.44 billion in the preceding fiscal year.
The company announced earnings per share (EPS) at Rs247.84 for the year ended June 30, 2022 as compared with EPS Rs235.71 in the previous year.
READ MORE: Engro, Excelerate Energy ink MoU to market RLNG in Pakistan
The board of directors of Mari Petroleum Company Limited was held on Thursday August 4, 2022, which recommended a final cash dividend for the year ended June 30, 2022 at Rs62 per share at 62 per cent. This is in addition to the interim dividend already paid at Rs62 i.e. 62 per cent.
The final cash dividend (including interim) will bring the total cash dividend to 50 per cent of the net profits of the company.
The overview of the financial results revealed that the company’s natural gas production increased by five per cent, while crude oil and condensate production remained steady, which translated into the highest-ever total production of 36.91 MMBOE. “This equates to a net daily average production of 101,109 boepd, which is above the 100,000 boepd mark for the very first time,” the company said.
READ MORE: Pakistan high petroleum prices massively cut oil sales in July
The company further said that the enhancement in production, greater financial discipline and better prices drove the company’s profit before tax to the highest ever Rs52.1 billion, which is 19 per cent higher from the last year’s results.
The tax charge for the year is Rs19.1 billion, which includes the provision for super tax of Rs5.2 billion, which has resulted in increased effective tax rate of 36.7 per cent in the fiscal year under review as compared with 28.4 per cent in the last fiscal year.
The company said that the above dividend will be paid to those shareholders whose names will appear on the register of members at the close of business on September 21, 2022.
READ MORE: Pakistan State Oil gets Rs30 billion to avoid default
According to the financial results the gross sales of the company massively increased to Rs108.97 billion for the year ended June 30, 2022 as compared with Rs82.69 billion in the preceding year. The payment impact of general sales tax and federal excise duty was Rs13.84 billion in the year ended June 30, 2022 as compared with Rs9.67 billion in the preceding year.
This brings the net sales of the company at Rs95.13 billion as compared with Rs73.02 billion. The company paid an amount Rs12 billion as royalty during the fiscal year 2021/2022 as compared with Rs9.31 billion in the preceding fiscal year.
Operating expenses of the company grew to Rs17.40 billion during the year ended June 30, 2022 as compared with Rs15.04 billion in the preceding year.
Meanwhile, the expenses on exploration and prospecting expenditure recorded massive growth to Rs10.93 billion during the fiscal year 2021/2022 as against Rs4.54 billion in the preceding fiscal year.
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Imran Khan demands substantial reduction in petroleum prices
ISLAMABAD: The chairman of Pakistan Tehreek-e-Insaf (PTI), Imran Khan on Monday demanded the present coalition government to reduce the petroleum prices drastically.
In a public address on Monday, after securing landslide victory in by-election, Imran Khan demanded the government to cut off petrol prices because the oil prices in the international market has been reduced sharply.
Imran Khan, the former prime minister who was removed from the executive post on April 10, 2022 through a motion of no confidence.
READ MORE: New petroleum prices in Pakistan from July 15, 2022
Earlier, in February 2022, Imran Khan as the prime minister announced massive relief to the masses through grant of huge subsidy on petroleum prices and electricity tariff.
The PTI had also kept the petroleum levy and sales tax at zero to avoid passing on the high prices of crude oil in international market.
Imran Khan said that during his government the prices of petroleum products were kept at subsidized rates when oil prices in the international market were $106 per barrel. But now oil prices have been drastically reduced to $96 per barrel, so the government should reduce the price of petrol products according to the ratio of oil prices in the international market.
The government on July 14, 2022 announced reduction in prices of petroleum products effective from July 15, 2022 after a massive decline observed in the prices of oil in international markets.
READ MORE: Slashing petroleum prices summary to be sent: Miftah
Following are the recent prices of petroleum products:
The prices of petrol have been decreased by Rs18.50 per liter to Rs230.24 from Rs248.74.
The rate of high speed diesel has been decreased by Rs40.54 per liter to Rs235.95 from Rs276.54.
The rate of kerosene oil has been decreased by Rs33.81 per liter to Rs196.45 from Rs230.26.
Similarly, the rate of light speed diesel has been decreased by Rs34.71 per liter to Rs191.44 from Rs226.15.
READ MORE: FPCCI demands 10% cut in petroleum prices
Although the Shehbaz led coalition government reduced the above prices ahead of by-election in Punjab but the PML-N failed to attract masses.
The PML-N secured only four seats out of 20 showing its failure. This has also strengthened Imran’s statement for conducting general elections without any delay.
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Petroleum dealers decide not to shut down petrol pumps
KARACHI: Pakistan Petroleum Dealers Association (PPDA) on Sunday decided to call of shut down strike scheduled for July 18, 2022 on government’s assurance to increase the dealers’ margin.
PPDA on July 02, 2022 announced a complete shutdown of petrol pumps from July 18, 2022 in protest of rise in cost of doing business and falling dealers’ margin.
READ MORE: Dealers threaten shutting down petrol pumps from July 18
The government has assured the petroleum dealers to increase dealers’ commission by 100 per cent. The government has agreed to increase the dealers’ commission from Rs3.5 to Rs7 per liter.
The government also assured the petroleum dealers to increase margin by Rs3.5 on petroleum products per liter. The government discussed that the procedure for increasing the dealers’ margin would be notified later.
READ MORE: NA approves levy on petroleum products up to Rs50/liter
According to the sources, the government will increase the 50 percent of dealers’ margin on July 31, 2022 and the next 50 per cent would be increased on August 15, 2022.
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Dealers threaten shutting down petrol pumps from July 18
KARACHI: Pakistan Petroleum Dealers Association (PPDA) on Saturday announced a complete shutdown of petrol pumps from July 18, 2022 in protest of rise in cost of doing business and falling dealers margin.
READ MORE: NA approves levy on petroleum products up to Rs50/liter
Abdul Sami Khan, Chairman, PPDA at a meeting discussed the current dealers margin, which were forcing petroleum dealers to shut down their business. The association demanded that the dealers margin should be enhanced to 6 per cent.
Sami Khan said that due to high cost of electricity their profit margin declined drastically. Besides, massive hike in prices of petroleum products also affected their business adversely.
READ MORE: New prices of petroleum products in Pakistan from July 01, 2022
He further added, the protest shut down would continue till the demands were accepted. He said that fuel stations could not continue supply while sustaining continuous losses. At present the dealers are receiving margin after deduction of tax at Rs3.20 per liter on diesel and Rs3.90 on petrol per liter.
READ MORE: Petroleum levy to generate Rs750 billion
He also recalled the promise of increasing margin to 4.5 per cent given by the previous PTI government but due to increased prices of diesel and petrol, the PPDA is facing many problems in operating the fuel stations.
The chairman threatened the present coalition government led by PML-N to close down the fuel stations if the demand of increasing margin to 6 per cent is not accepted.
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Petroleum levy to generate Rs750 billion
ISLAMABAD: The government has estimated a collection of Rs750 billion as petroleum levy during next fiscal year 2022/2023.
It is worth mentioning that the previous PTI government had not imposed a petroleum levy in order to provide petroleum products at cheaper rates.
READ MORE: FBR assigned tax collection target of Rs7 trillion in 2022/2023
However, the current coalition government led by PML-N in its budget 2022/2023 announced on June 10, 2023 estimated collection of Rs750 billion during the next fiscal year.
The government has estimated a collection of Rs135 billion in the current fiscal year.
READ MORE: Budget 2022/2023: Salient features of customs duty act
The present government also estimated an amount of Rs40 billion through natural gas development surcharge during the next fiscal year as compared with existing estimates of Rs30 billion in the outgoing fiscal year.
An amount of Rs70 billion has been estimated to be collected from royalty on natural gas during the next fiscal year as compared with existing estimates of Rs60 billion in the current fiscal year.
READ MORE: Budget 2022/2023: Salient features of sales tax
Under the head of gas infrastructure development cess (GIDC) the government is estimating a collection of Rs200 billion during the next fiscal year as compared with existing Rs25 billion in the current fiscal year.
The government has also estimated a collection of Rs10 billion from windfall levy against crude oil as compared with estimated Rs12 billion in the outgoing fiscal year.