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POL prices hike could be averted by relaxing custom duty

POL prices hike could be averted by relaxing custom duty
October 18, 2021 --- Web Desk

Sohail Iqbal Bhatti

ISLAMABAD – Recent massive hike in petrol and diesel prices could be averted only if the government decided suspension of custom duty imposed in their per litre prices from October 16, 2021.

Sources in petroleum sector said that the government had imposed custom duty in the prices of per litre of diesel & petrol mainly for the up-gradation of refineries and the amount so far collected under the head custom duty would be given to the refineries from the year 2022. And, the government could maintain prices of petrol and high speed diesel (HSD) at the same level for remaining half of the current month (October) to some extent by suspending 10 percent custom duty imposed in per litre prices of petrol and diesel from 16th October, 2021.

Sources said that recent significant hike in petrol and diesel prices could be averted also by relaxing the imposition of GST and custom duty on their sale from October 16, 2021 till the end of this month.

“The government would find enhanced revenue collection under the head GST on petrol and diesel prices during last fifteen days of current month if count the revenue collection on account of GST of the first half of October 2021,” said sources.

They added that the government to some extent could provide a sigh of relief to masses by relaxing GST and suspending custom duty on petrol and diesel prices from October 16, 2021.

According to documents, breakup of the prices of petroleum products with effect from 16th October, 2021 disclosed that ex-depot sale price of MS 92 RON (Petrol) is Rs 137.79/litre while its (Petrol) ex-refinery price is Rs 103.30/litre, and custom duty included in petrol price is Rs 9.27/litre. Inland Freight Equalization Margin (IFEM) in petrol price is Rs 3.90/litre, Oil Marketing Companies (OMCs) margin in petrol price is fixed at Rs 2.97/litre, dealers commission is fixed at Rs 3.91/litre, petroleum levy in petrol price is Rs 5.62/litre, and GST share in petrol price is Rs 8.82/litre (6.84%).   

Similarly, ex-depot sale price of high speed diesel (HSD) is Rs 134.48 while its (HSD) ex-refinery price is Rs Rs 100.52/litre and custom duty included in HSD (diesel) price is Rs 8.81/litre. Similarly, IFEM in diesel price is Rs 1.16/litre, OMCs’ margin in diesel price is fixed at Rs 2.97/litre, dealers commission is fixed at Rs 3.30/litre, petroleum levy in petrol price is Rs 5.14/litre, and GST share in petrol price is Rs 12.58/litre (10.3%).

On the other hand, break up of prices of petroleum products with effect from 1st October, 2021 disclosed that ex-depot sale price of Petrol was Rs 127.30/litre while its ex-refinery price was Rs 93.97/litre, and custom duty included in its (petrol) price was Rs 8.80/litre. IFEM in petrol price is Rs 3.88/litre, OMCs margin in petrol price was fixed at Rs 2.97/litre, dealers commission is fixed at Rs 3.91/litre, petroleum levy in petrol price is Rs 5.62/litre, and GST share in petrol price is Rs 8.15/litre (6.84%).   

Moreover, from 1st October, 2021, the ex-depot sale price of HSD was Rs 122.04/litre while its (HSD) ex-refinery price is Rs 89.75/litre and custom duty included in diesel price was Rs 8.31/litre. Similarly, IFEM in diesel price was Rs 1.15/litre, OMCs’ margin in diesel price is fixed at Rs 2.97/litre, dealers commission is fixed at Rs 3.30/litre, petroleum levy in petrol price is Rs 5.14/litre, and GST share in petrol price is Rs 11.42/litre (10.3%).