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Tag: petroleum prices

  • Petrol tax rate cut by 73% to lower global oil price impact

    Petrol tax rate cut by 73% to lower global oil price impact

    ISLAMABAD: The federal government has announced a reduction of 73 per cent in sales tax rate on supply of petrol in order lower the impact of high global oil prices.

    In this regard the Federal Board of Revenue (FBR) issued a notification i.e. SRO 1450(I)/2021 to reduce the sales tax rate on petrol and High Speed Diesel (HSD).

    According to the notification the rate of sales tax has been reduced to 1.43 per cent from the rate of 6.84 per cent. The FBR issued previous notification SRO 1327(I)/2021 on October 7, 2021.

    The revenue body also reduced the rate of sales tax on High Speed Diesel (HSD) to 6.75 per cent from 10.32 per cent.

    However, the sales tax rates on kerosene and Light Diesel Oil (LDO) have been kept unchanged at 6.70 per cent and 0.20 per cent, respectively.

    It is worth mentioning here that the normal rate of sales tax is 17 per cent. The present government has already reduced the rate of sales tax on petroleum products to the lowest level to minimize the impact of sharp rise in global oil prices.

    The government on November 04, 2021 notified increased in petroleum prices, which are now all time high.

    The petrol was fixed at Rs145.82 per litre instead of Rs137.79, showing an increase of Rs8.03. The price has been increased from previous high of Rs137.79.

    Similarly, the price of high speed diesel has been increased by Rs8.14 to Rs142.62 from Rs134.48.

    The rate of kerosene oil has been increased by 6.27 per liter to Rs116.53 from Rs110.26. Likewise, the price of light diesel oil has been increased by Rs5.72 per liter to Rs114.07 from Rs108.35.

    A notification issued by the Finance Division stated that on November 01, 2021, the prime minister had not agreed with the proposals worked out by the Oil and Gas Regulatory Authority (OGRA) and the finance division directed to maintain the prices as notified on October 16, 2021.

    It is pertinent to mention that maintaining the October 16, 2021 petroleum prices had some underlying concerns for cash flow issues due to short recovery of the cost, according to the statement.

    It is important to note that in the previous petroleum prices, already a significant relief was provided to the consumers. The government is cognizant of its responsibility to provide maximum relief to the consumers.

    “This has dented the petroleum levy budget of Rs152.5 billion during July – September, 2021 as compared to Rs20 billion realized only,” it said.

    Foregoing in view, prices of petroleum products have been increased partially as compared to the prices being worked out by the OGRA. If the government had accepted OGRA’s recommendations, the new prices would have been much higher.

    Infact, the government has absorbed the bulk of the pressure after making adjustment after making adjustment in the sales tax and petroleum levy. The collection of petroleum levy is far short of its fixed target for the first quarter of the fiscal year 2021/2022, it added.

    Petrol price increases to new high of Rs145.82 per liter
  • Petrol price increases to new high of Rs145.82 per liter

    Petrol price increases to new high of Rs145.82 per liter

    ISLAMABAD: The government on Thursday night announced an increase of Rs8.03 to Rs145.82 per liter in the price of petrol effective from November 05, 2021.

    The government announced increase in prices of all petroleum products.

    The price has been increased from previous high of Rs137.79.

    Similarly, the price of high speed diesel has been increased by Rs8.14 to Rs142.62 from Rs134.48.

    The rate of kerosene oil has been increased by 6.27 per liter to Rs116.53 from Rs110.26. Likewise, the price of light diesel oil has been increased by Rs5.72 per liter to Rs114.07 from Rs108.35.

    A notification issued by the Finance Division stated that on November 01, 2021, the prime minister had not agreed with the proposals worked out by the Oil and Gas Regulatory Authority (OGRA) and the finance division directed to maintain the prices as notified on October 16, 2021.

    It is pertinent to mention that maintaining the October 16, 2021 petroleum prices had some underlying concerns for cash flow issues due to short recovery of the cost, according to the statement.

    It is important to note that in the previous petroleum prices, already a significant relief was provided to the consumers. The government is cognizant of its responsibility to provide maximum relief to the consumers.

    “This has dented the petroleum levy budget of Rs152.5 billion during July – September, 2021 as compared to Rs20 billion realized only,” it said.

    Foregoing in view, prices of petroleum products have been increased partially as compared to the prices being worked out by the OGRA. If the government had accepted OGRA’s recommendations, the new prices would have been much higher.

    Infact, the government has absorbed the bulk of the pressure after making adjustment after making adjustment in the sales tax and petroleum levy. The collection of petroleum levy is far short of its fixed target for the first quarter of the fiscal year 2021/2022, it added.

    Petrol price goes up to record high at Rs137.79/liter
  • FPCCI rejects hike in petroleum, electricity prices

    FPCCI rejects hike in petroleum, electricity prices

    The Businessmen Panel (BMP) of Federation of Pakistan Chambers of Commerce and Industry’s (FPCCI) has rejected hike in prices of petroleum products and electricity.

    BMP Chairman Mian Anjum Nisar, while strongly reacting to increase in electricity base tariff by Rs 1.39 per unit for the second time in one year, along with exorbitant hike of Rs10.49 per litre in petrol prices, has said that the government has declared another minibudget by burdening the trade and industry with billions of rupees new taxes in the form of huge increase in electricity, gas and petroleum rates.

    FPCCI’s Businessmen Panel Chairman Mian Anjum Nisar observed that the government has raised the petroleum product price for the third consecutive time in one month period, lifting it by more than Rs20 per litter to Rs137.79 per litre, as the authorities hiked the oil prices by Rs4.50 on Sept 16, then by Rs5.50 on Oct 1 and now by Rs10.49 per litter on Oct 16, 2021.

    “It is unfortunate that the authorities had reduced the petroleum rates just by Rs1.50 one and a half months back on Sept 1, 2021,” he added.

    Moreover, the federal government has announced to increase electricity base tariff by Rs 1.39 per unit across the country from Nov 1, while it had already enhanced the base power tariff by Rs 1.95 per unit in January this year along with quarterly and monthly electricity price hike under fuel adjustment formulas, totaling the power price hike to over Rs5 per unit, he claimed.

    He said that the National Electric Power Regulatory Authority (NEPRA) has allowed an increase of Rs1.65 per unit in power tariff, under quarterly adjustments, which will empower the distribution companies to collect Rs173 billion from consumers in the next one year. He said that the trade and industry were expecting some relief at the expiry of early adjustments of Rs1.62 per unit on Sept 30, 2021, however, the NEPRA announced the transfer of new adjustments equal to Rs1.65 per unit to the consumers with effect from Oct 1, 2021.

    FPCCI former president rejected the increase in power prices along with the periodic hike in rates of petroleum products. He said the increase in power and fuel prices will increase the cost of production for the industrial section which in turn will impact the ease of doing business and exports. This will ultimately hit the economy as envisioned by the Prime Minister, he maintained.

    Condemning the government’s move, the ruling group chief of apex chamber said the increase was being done to meet the conditions of the International Monetary Fund.

    It is unfortunate that Minister for Finance Shaukat Tarin had pledged a day earlier – on October 14, 2021 in Washington DC while attending the annual meeting of IMF – that electricity tariff will not be increased.

    Rejecting the latest increase in electricity and petroleum prices, he termed it a cruel decision by the authorities, which will bring the economy to a grinding halt. Millions more will be unemployed while millions are facing abject poverty and starvation. Imposition of 17 per cent sales tax on exempted items, increase in petrol, electricity prices is not just for the economy, he said.

    He further said the government had dropped a new bomb on the trade and industry at a time when inflation and unemployment was at an all-time high and the economy was facing total collapse because of government’s incompetence.

    The government blindly acted on the terms of the IMF and did not bother to care about the public interest. He warned that severe inflation was creating a serious problem of economic viability of the country which was not a good omen for Pakistan.

    Businessmen Panel Chairman Mian Anjum Nisar said the constant increases in energy rates on the behest of the International Monetary Fund (IMF) would make the Pakistani products uncompetitive in the international market.

    He opposed the government’s move of raising power tariff by more than Rs5 per unit, besides lifting rates of petroleum products twice a month to qualify for the revival of the stalled $6 billion IMF loan program, leading the economy towards point of no return due to interference of the International Monetary Fund.

    Mian Anjum Nisar said it was imperative to make power and gas tariffs for domestic, as well as export sectors compatible with the tariff being applied in regional and neighboring countries.

  • Karachi Chamber appeals subsidizing petroleum prices

    Karachi Chamber appeals subsidizing petroleum prices

    Karachi Chamber of Commerce and Industry (KCCI) on Saturday appealed the government to subsidize prices of petroleum products as continuous hike in prices will badly affect business community as well as masses.

    Chairman Businessmen Group (BMG) & Former KCCI Zubair Motiwala, while expressing sheer dismay over exorbitant hike in petroleum prices by Rs10.49 per liter, appealed the Government to subsidize the impact of international oil prices as the increase in petroleum prices would not only affect the overall economic performance but would also intensify the hardships for businesses and the masses who were already overburdened because of inflation and their budgeting would be further disturbed due to hike in petroleum prices and also the electricity tariff.

    “The current government has always desired that the cost of doing business is reduced but all these steps are in contrast to the policy of the government as the nation nowadays suffers badly due to frequent hikes in petroleum prices, electricity & gas tariffs and other utilities in addition to fluctuating exchange rates and higher duties on imports”, Chairman BMG added in a statement issued here on Saturday.

    He further pointed out that it was a matter of grave concern that the winter season has not yet arrived in Karachi but gas supply to CNG stations has been suspended for 10 consecutive days which was really worrisome.

    He said: “We are well-aware that the international oil prices were on the higher side but the impact must not be passed on to the public as done in the past. The petrol and diesel prices in Pakistan peaked at Rs87 and Rs65 per liter during the historically highest ever international crude price of $147.27 per barrel in July 2008 and now when it was around US$85, the petroleum prices have been raised to a whopping Rs137.79 per liter which was beyond our understanding.”

    Referring to severe devaluation of Pakistani rupee against dollar, Zubair Motiwala said that the rupee was seen devaluating by approximately 12.4 percent against US Dollar from Rs152.30 on May 17, 2021 to around Rs171.20 as on October 16, 2021. “Severe devaluation of rupee has raised the cost of doing business and fostered the inflation, therefore, it is really crucial to review the current strategies being pursued by the economic managers.”

    “The government needs to understand that the share of exports in GDP stood at 8 percent while the rest of 92 percent was local trade and imports hence the devaluation is hurting and has reached to a level where it has become unbearable”, he added.

    He stressed that the emerging situation has to be efficiently addressed and handled very carefully otherwise, the rising petroleum prices and excessive devaluation will continue to increase the cost of doing business, which would terribly affect the industrial performance, raise unemployment and open the floodgates of inflation, particularly for the middle and lower segments of the society, besides making the poor poorer due to unbearable inflation. “The inflation monster needs to be effectively controlled.”

    He further opined that increase in electricity tariff was probably due to ‘Take or Pay Agreements’ with the Independent Power Producers (IPPs) so the brunt of the policy should not be put on the people of Pakistan.

    He also underscored that the import substitution industries, SMEs, Small Traders and Shopkeepers who were the backbone of economy cannot bear such shocks. The federal and provincial governments must help them out by providing loans at zero percent interest rate for their survival otherwise they will become bankrupt.

    He hoped that the Federal Government would realize the gravity of the situation and accordingly take steps to stop further devaluation of rupee against dollar and also look into the possibility of subsidizing petroleum prices as done in the past.

    Meanwhile, President KCCI Muhammad Idrees, while appreciating the Sindh Government’s decision to lift the restriction imposed on carrying out businesses on Sunday which was earmarked as Safe Day, stated that the business community was very happy to see that Chairman Businessmen Group Zubair Motiwala fulfilled his commitment to small traders/ shopkeepers within 24 hours by successfully convincing the Sindh government to allow business activities on Sunday.

    “KCCI warmly welcomes Sindh Government’s notification in which businesses have been allowed to operate on Sunday which would certainly help in minimizing the grievances being suffered by shopkeepers who underwent severe losses due to COVID-19 pandemic and subsequent lockdowns”, he added.

    He said that by promptly and affirmatively responding to Chairman BMG’s request, Chief Minister Sindh has proved that the Sindh government was undoubtedly a peoples’ friendly government which despite so many challenges, tries its best to somehow provide relief to the public whenever possible. 

    KCCI flays restoration of IR officers bank freezing powers
  • Petrol price goes up to record high at Rs137.79/liter

    Petrol price goes up to record high at Rs137.79/liter

    ISLAMABAD: The government on Saturday increased the price of petrol to a record high at Rs137.79 per liter. The government announced to increase prices of all petroleum products with effect from October 15, 2021.

    The price of petrol has been increased by Rs10.49 to Rs137.79 from Rs127.30 per liter. The price of High Speed Diesel (HSD) has been increased by Rs12.44 to Rs134.48 from Rs122.04 per liter. The price of kerosene oil has been enhanced by Rs10.95 to Rs110.26 from Rs99.31 per liter. Similarly, the price of light diesel oil has been increased by Rs8.48 to Rs108.35 from Rs99.51 per liter.

    A notification issued by the Finance Division said at present, oil prices have risen around $85 a barrel, which is the highest since October 2018.

    Importantly, entire energy chain prices have witnessed a strong surge in the past couple of months due to higher demand for energy inputs and supply bottlenecks.

    In the current scenario, the government has absorbed the pressure and provided maximum relief to the consumers by keeping petroleum levy and sales tax to a minimum level. Therefore, prices worked out by OGRA have been approved, according to the statement.

    Petrol price increases to record high at Rs127.30/liter
  • Sales tax on petrol slashed to 6.84%

    Sales tax on petrol slashed to 6.84%

    In a move aimed at providing relief to consumers, the federal government has announced a reduction in the sales tax rates on the supply of petrol and high-speed diesel (HSD).

    (more…)
  • Tarin defends price hike in petroleum products

    Tarin defends price hike in petroleum products

    ISLAMABAD: Finance Minister Shaukat Tarin on Friday defended the hike in prices of petroleum products effective from October 01, 2021.

    He said that the government was absorbing the impact of the decade’s highest price-hike at international level to provide relief to people through various measures including direct food subsidy to the poor.

    Addressing a news conference, along with Minister of State for Information and Broadcasting, Farrukh Habib, the federal minister said that Covid-19 pandemic had triggered price hike all across the globe, adding that since Pakistan was importer of some essential commodities, hence it was impacted too.

    He said that the government had not passed on all this impact to people.

    Talking about the hike in petrol price, the minister said that Pakistan was at 17th number among the countries providing the commodity at the lowest prices, adding that the majority of the other 16 countries having lowest prices than Pakistan were oil-producing countries.

    He said that petrol prices in the country were even lower than regional countries, as it was being sold at Rs127 per liter in Pakistan whereas its price in India was Rs235 per liter and Rs195 per liter in Bangladesh.

    He said that the government wanted to reduce prices as it had already slashed the petroleum development levy from Rs30 in 2018 to just Rs2.5 per liter.

    He said, that the government had budgeted Rs600 billion from petroleum levy, which could be affected as the prime minister wanted to provide relief to people.

    Tarin said that it was very unfortunate that no proper attention was given towards agricultural sector for last three decades and resultantly, the country had become net importer of wheat, sugar, pulses and ghee and was directly affected by world inflation.

    He said despite all this, the government had taken measures to provide relief to people, particularly poor. The government had to buy sugar at higher rates, but it would be available around Rs90 per kilogram likewise, ghee prices that witnessed around 80-90 percent hike in international market and was available at Rs350 in Pakistan, would come down to below Rs 300 per KG.

    He said that the government would also provide direct food subsidies to 12.5 million families which constitute around 44 percent of total population. The subsidy would be provided on flour, sugar, ghee and pulses.

    The finance minister said the government was also evolving a mechanism to minimize the role of middlemen, which he said was one of the major causes of inflation adding that the provinces have also been asked to reestablish provincial price administrators to control prices.

    He said that the economy of the country was growing as the revenues have witnessed over 38 percent increase and exceeded the target by Rs186 billion.

    This means economy was growing, he said and expected that it would grow by 5 percent during the current fiscal year and resultantly it would have trickle down effect.

    He said that the major sectors of the economy including agriculture, industry and services sector were witnessing growth.

    He said that Kamyab Pakistan Programme would also be launched soon under which farmers would be provided interest-free loans of Rs150,000 per crop, Rs200,000 interest-free loans on mechanization whereas urban households would be provided Rs500,000 per family to start businesses.

    In addition, the government was also providing loans up to Rs2 million at 2 percent interest loans for construction of houses whereas health-cards were being provided to facilitate people.

    He said that the prime minister was very concerned about the welfare of common people.

    About debts, the minister said that the debt-to-GDP ratio came down by 4 percent last year, expecting that it would come down further during the current year.

    To a question, the minister said that the government would sincerely negotiate with the International Monetary Fund (IMF). He said that we had promised to collect revenues of RS5.8 trillion and the collection numbers till date show that the target would be exceeded.

    He said there were certain challenges faced in the power sector, but added that enhancing tariff rates, as advised by the IMF, was not a solution to the issue, so we would like IMF to provide space in this matter.

    Petrol price increases to record high at Rs127.30/liter
  • Petrol price increases to record high at Rs127.30/liter

    Petrol price increases to record high at Rs127.30/liter

    The government on Thursday announced a significant hike in the price of petrol, increasing it by Rs 4 per liter, bringing the cost to an all-time high of Rs 127.30 per liter. This marks the highest petrol price in Pakistan’s history. The new prices, along with adjustments to other petroleum products, will take effect from October 1, 2021.

    (more…)
  • Prices of all petroleum products reduced

    Prices of all petroleum products reduced

    ISLAMABAD: The federal government on Tuesday announced a reduction in prices of all petroleum products for next fortnight.

    A statement issued by the Finance Division the new reduced prices will take effect from September 01, 2021.

    According to the notification the price of petrol has been reduced by Rs1.50 to Rs118.30 per liter from Rs119.80.

    The price of high speed diesel (HSD) has been reduced by Rs1.50 to Rs115.03 per liter from Rs116.53.

    Similarly, the rate of kerosene oil has been reduced by Rs1.50 to Rs86.80 per liter from Rs88.30.

    The price of light diesel has been reduced by one rupee to Rs84.77 per liter from Rs85.77.

    The statement issued by the finance division said that despite international price fluctuation in petroleum products and anticipated increase in future prices, the government has reduced the price in order to provide maximum relief to the consumer.

    The government is firmly committed to ensure stability in prices of essential commodities and has sustained the price pressure in line with its commitment to the common man.

    It is pertinent to mention that petroleum levy is kept at minimum which is a clear reflection that the government is fully cognizant of the impact of fuel prices on the prices of basic items that affect people directly.

  • Prices of kerosene oil, LDO increased for next fortnight

    Prices of kerosene oil, LDO increased for next fortnight

    ISLAMABAD: The government has increased the prices of kerosene oil and Light Diesel Oil (LDO) for next fortnight effective from August 16, 2021.

    The prices of kerosene oil have been increased by Rs0.81 per liter, from Rs87.49 to Rs 88.30.

    Likewise, the prices of Light Diesel Oil (LDO) have been increased by Rs1.10 per liter from Rs84.67 to Rs85.77.

    However, the government kept prices of petrol and diesel unchanged with effective form August 16 for next fortnight.

    According to press statement issued by the Finance Ministry, the sale of petrol would continue on Rs119.80 till August 31st.

    Likewise, prices of High Speed Diesel (HSD) would remain unchanged at Rs116.53 per liter.

    FBR reduces sales tax rate on petrol to 10.77%