The All Pakistan Business Forum (APBF) has condemned the sixth consecutive hike of petrol prices, showing a jump of around 20% from Rs.70 to Rs.85 per liter during last six months of Sept 2017 to Feb 2018, leading to increasing cost of production ultimately.
The Ministry of Finance kept the rates of petroleum products at the existing level for the month of August 2017 at about Rs70 per liter despite reduction of oil prices in the global market.
In Aug 2017, the Oil and Gas Regulatory Authority (Ogra) had recommended the government to reduce the prices of Petrol and High Speed Diesel by Rs3.67 and Rs5.07 per litre respectively for the month of August but the govt maintained the rates at previous level, instead of passing on benefit to the public.
Ibrahim Qureshi flayed the government for increasing prices of petroleum products by over Rs15 per liter in last six month, terming it bad news for the country’s economy. He said though the prices of oil in global market are going up yet the authorities can keep the rates stable by reducing tax ratio which is highest in the region.
He said that against the standard rate of 17 per cent general sales tax, currently the government is charging 31 percent GST on high speed diesel and 17 per cent on other petroleum products including petrol, kerosene oil and LDO.
In addition to the GST, the government was charging highest rates of Petroleum Development Levy from the consumers. Currently, the consumers are paying Rs10 per litre petroleum development levy on petrol, Rs.8 on HSD, Rs.6 per litre on kerosene oil and Rs.3 per litre on the LDO.
In the past, the government did not pass on the full benefit of declining oil prices to the public by imposing heavy taxes. It is the time to relax the duties and absorb the burden of soaring petroleum prices in international market by keeping the prices stable.
Ibrahim Qureshi, terming it a bad news for the country’s economy which was already facing a number of challenges, said that the increase would put extra burden on the consumers.
At a time when country’s trade deficit was further stretched by over 35 percent owing to rise in imports and slow exports growth amidst high cost of doing business, the continuous hike petroleum as well as power tariff is very unfortunate.
As per the notification, the government increased price of HSD by Rs5.92 per litre or 6.58 per cent taking the price from Rs89.91 to Rs95.83 per litre. Diesel is widely used in transport and agriculture sector, and therefore, increase in its price would increase the input cost of farmers.