Summary Prices of diesel are likely to decline from Rs39.38 for January to Rs31.62 per litre for February.
Dunya News Report (Humaira Sajid)
ISLAMABAD - The Ministry of Petroleum said that reduction of oil prices in international market has increased the prospects of further decline in prices of petrol and diesel in the country. The petrol prices are expected to be slashed by Rs5.45 per litre and the cost of diesel might fall by Rs7.76, however an outsized sales tax of 51 per cent will be imposed on the general public from February onwards, said the officials.
The oil marketing companies’ officials predict the ex-refinery prices of diesel are likely to decline from Rs39.38 for January to Rs31.62 per litre for February.
According to a survey, Pakistanis consume some 434,000 barrels a day. In 2014 when the OPEC basket price was $96.29 a barrel, Pakistanis consumed $15 billion worth of oil. By early 2016, the OPEC basket price had fallen to $25 and, as a consequence, the value of oil consumed by Pakistanis had gone down to $4 billion. As per records, the difference in value between 2014 and 2016 is a whopping $11 billion which leaves the economist’s wondering about the direction of $11 billion bonanza.
The Pakistan Industrial and Traders Associations Front (PIAF) Chairman Irfan Iqbal Sheikh said in Pakistan it has been the practice that the government increases the GST on Petroleum, Oil and Lubricants POL products to maintain its revenue collection while the general public and consumers are deprived of this benefit and traders and industries lack the level playing field to complete and play their due role in the national economy.
He further said that in the wake of huge decline in global oil price, it is the need of the hour that government passes on full benefit of reduced oil prices to the people. But instead of providing relief, government has enhanced GST on POL products which will significantly neutralize the positive impact of falling oil prices and affect the economic growth of the country.
Sherman Securities, a corporate member of The Karachi Stock Exchange (Guarantee) Limited said presently the consumers pay around Rs24 and Rs27 per litre sales tax on petrol and diesel and domestic oil prices do not show any big drop as the government raises taxes to meet its budgetary targets.
An official of the petroleum ministry said: “The prices are estimated by the middle of each month, based on the traditional consumption pattern, local production and the import prices”.
The opposition parties in parliament have frequently criticized the government over inclination of recovering revenue shortfall from diesel and petrol. The Senate’s Standing Committee’s Chairman Salim Mandviwalla said “We are planning to take up this issue in the upcoming meeting as it relates directly with the ordinary citizens”.
Further giving his statement on the pressing issue he said now the government seems to have gone too far by covering all its weaknesses in revenue collections from oil. “It is time to pass on the benefit of declining crude prices to consumers. It will help the economy, too” he asserted.
The Pakistan People’s Party (PPP) Punjab President Mian Manzoor Ahmed Wattoo referred to the decrease in prices as a mockery by the government and pointed out the raised GST from 17 percent to 22 percent on petroleum products which is apparently giving from one hand and taking away from the other. He added that the government initially said the whole decrease in petroleum prices were not being passed on to the consumers as they were trying to recover the subsidies paid in the head in the past.
