Pakistani consumers paying more for oil despite dip in international market

ISLAMABAD – Despite a decline in crude oil prices in international market, the government is not only reluctant to decrease the prices for local consumers but is also receiving heavy taxes by burdening the people, especially those who mostly use petrol and diesel for cars, motorbikes and agriculture machinery.

In order to overcome the revenue shortfall, the government is providing petroleum products at up to 38 percent higher prices than in the international market, reported local media.

A major part of agriculture and transport sector extensively uses the diesel among other products; therefore its high price puts an extra burden on farmers and makes the inflation sky high.

Tribune sharing a report prepared and sent by the Oil and Gas Regulatory Authority to the Economic Coordination Committee stated that the previous fiscal year was the worst for Pakistan’s oil consumers as they paid the highest rate of general sales tax (GST) on diesel.

Consumers paid up to Rs29.57 in GST on every litre of diesel during 2015-16 along with Rs6 as petroleum levy, the report added.

Consumers also paid up to Rs15.22 in GST on per litre of petrol, Rs13.18 per litre on kerosene oil and Rs12.21 per litre on light diesel oil (LDO), which were the highest tax rates received by the government for a few months.

In the current year, the highest rate of GST on petrol was Rs10.71 per litre, kerosene oil Rs2.83 and light diesel oil Rs4.64.

In 2013-14 when the incumbent government held power, the maximum rates of GST were observed at Rs16.96, Rs16.45, Rs15.71 and Rs14.71 per litre on diesel, petrol, kerosene oil and LDO respectively.

Overall, the government is generating over Rs25 billion as GST on petroleum products and Rs10 billion in petroleum levy every month.