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Govt passes on burden of maintaining oil prices at current level to OMCs/refineries

Govt passes on burden of maintaining oil prices at current level to OMCs/refineries
November 1, 2021 Web Desk

Sohail Iqbal Bhatti

ISLAMABAD – Instead of reducing the levy and taxes imposed in oil prices, the government has allegedly passed on the burden of maintaining the oil prices at current level from November 1st to the Oil Marketing Companies and refineries of the country.

According to sources, the government has passed on additional burden of approximately Rs 20 billion to OMCs and refineries for giving relief to masses by maintaining the prices of petroleum products at current level from 1st November, 2021.  And, on finding advice from the government, the Oil and Gas Regulatory Authority (OGRA) has informed the OMCs that they would be duly compensated for maintaining the prices of petroleum products at same level through Price Differential Claim (PDC) of Rs 10.79 per litre in petrol and Rs 7.70/liter in high speed diesel (HSD), Rs 5.87/litre in Kerosene oil and Rs 5.71/liter in light diesel oil (LDO). They said the OMCs except state-owned Pakistan State Oil (PSO) will face financial problems while bearing the burden of billions of rupees with effect to the government decision of maintain the oil prices at current level. After 2008, this government has now maintained the oil prices at same level without reducing the taxes imposed on the petroleum products, said sources.

They added that a similar PDC was earlier given to the OMCs by the then government in 2008 and the OMCs received this PDC after passing ten years and later on, National Accountability Bureau (NAB) and Federal Investigation Agency (FIA) investigated officials of petroleum division for the payment of PDC to the OMCs.

Sources also said that the government could maintain the prices of petroleum products at the same level for further orders by giving an end to the levy and by reducing the General Sale Tax (GST) included in the oil prices especially in petrol and diesel. However, it decided to pass on the burden of maintaining the prices of petroleum products at same level to the OMCs and refineries.

“The finance division has played role in finding a solution for maintaining oil prices at same level from 1st November 2021 by passing on the burden owing to keeping oil prices at same level to the OMCs,” said sources.

As per available breakup of prices of petroleum products with effect from 1st November, 2021, the government has been charging petroleum levy (PL) of Rs5.62/litre, GST of Rs 6.82/litre (6.84pc) in petrol (MS 92 RON) while it has also been collecting Rs 5.14/litre under the head petroleum levy and Rs 12.58/liter (10.32percent) as GST in HSD (diesel) price.