ISLAMABAD: The 35 percent reduction in the prices on overall petroleum products during the past seven months have inflicted revenue loss of Rs.68 billion to the government, yet the sale rates in Pakistan are lowest among the regional countries.
The government had to increase sales tax rate to help it mitigate the losses it has been suffering due to the reduction in tax revenues.
“The two recent increases in sales tax rate will make up for a loss of Rs 28 billion approximately, still leaving a revenue loss of Rs 40 billion approximately,” Finance Ministry sources told APP.
Giving details, the sources said that the prices of petrol have reduced by 35 percent from August 2014 to February 2015 by going down from Rs109.79 to Rs70.29, witnessing a considerable decrease of Rs37.68.
The prices of high speed were reduced from Rs109.34 in August 2014 to Rs80.61 in February 2015, a decline of Rs28.73, showing negative growth of 26.27 percent.
During the period under review, the prices of kerosene oil decreased by 36.69 percent, from Rs97.05 to Rs.61.44, showing difference of Rs35.61 while the prices of Light Diesel Oil (LDO) decrease by 37.87 percent, from Rs93.27 to Rs57.94, a decline of Rs.35.33 percent.
The prices of HOBC also reduced from Rs134.63 to Rs80.31, a difference of Rs54.32 percent, showing decrease of 40.34 percent in the prices of the commodity from August 2014 to February 2015.
As compared to the previous month, the prices of petrol reduced from Rs78.28 in January to Rs70.29 in February, the prices of high speed diesel from Rs86.23 to Rs80.61, kerosene oil from Rs71.92 to Rs61.44, light diesel oil from Rs67.50 to Rs57.94 while the prices of HBC reduced from Rs92.13 to Rs80.31.
Official data of the ministry revealed that there has been Rs10.75 reduction in the petrol prices whereas the sales tax retained would be Rs2.76, so the end consumers would still be provided the relief of Rs7.99 percent.
Similarly, on high speed diesel, the total reduction would be Rs8.8 percent and with the retention of Rs3.18 as sales tax, the benefit of Rs5.62 would be transferred to people while on Kerosene oil, people were provided relief of Rs10.48 as the total reduction has been Rs12.90 and the sales tax cut only Rs2.42.
The prices of Light Diesel Oil were reduced by Rs11.84 and with retention of Rs2.28 sales tax, the people were provided relief of Rs9.56 whereas as on HOBC, the government passed the relief of Rs11.82 as the total reduction was Rs14.98 with Rs3.16 the sales tax.
Giving international comparison of oil prices sources said in Australia one litre of petrol was being sold at Rs91.2, Germany Rs144.2, France Rs145.27, United Kingdom Rs 162.80, Turkey Rs 172.40, Itlay Rs 175, New Zeleand Rs 177.30, India Rs 103.39, Sri Lanka Rs 97.91, Nepal Rs 102.10 and in Pakistan petrol was available in abundance at Rs 70.29 per litre.