The price of compressed natural gas (CNG) has been increased by up to Rs1.06 per kilogramme in a bid to raise funds for gas import projects including Iran-Pakistan and Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline projects.
The government has imposed a general sales tax on Gas Infrastructure Development Cess charged on CNG sale, according to a notification issued by Oil and Gas Regulatory Authority (Ogra) on Monday.
CNG price has gone up Rs1.06 to Rs75.35 per kg in Zone-1 that includes areas of Khyber-Pakhtunkhwa (K-P), Balochistan and Potohar Region (Rawalpindi, Islamabad and Gujarkhan), according to details.
Meanwhile, the price has been increased by Rs0.54 per kg to Rs70.15 per kg in Sindh and Punjab excluding Potohar Region that makes up Zone-2.
Fate of petroleum
The prices of petroleum products are not going to be left behind as their prices are also expected to surge up to Rs8.5 per litre from March as neither the finance ministry nor provinces are ready to decrease their revenue in a bid to keep prices unchanged.
The finance ministry in a recently held meeting had emphasised that hike in oil prices should be passed on to consumers as it would lose billions of rupees in revenue if petroleum levy was decreased to maintain prices, an official told The Express Tribune.
Officials said that the petrol price was expected to increase by Rs2.75 per litre, diesel by Rs1.30, kerosene oil by Rs4.50, Light Diesel Oil (LDO) by Rs3 and high octane by a whopping Rs8.50 per litre.
Ogra will move a price summary to the petroleum and finance ministries today (Tuesday) and recommend not to hike oil prices to provide relief to consumers, official added.
Finance Ministry has claimed to receive Rs31 billion on account of petroleum levy on petroleum products during the first six months of fiscal 2012 (July to December 2011) against target of Rs64 billion. The government’s collection through general sales tax on petroleum products remained unchanged at Rs146 billion during the first six months of the current financial year against Rs146 billion collected during the same period a year ago.
Any increase in oil price will also take the rate of general sales tax upwards, an official said. The federal government wants the provincial governments to share the burden of reducing oil prices from the resources transferred to them from the divisible pool. The provinces will receive around 70% of the Rs1,952 billion that the Federal Board of Revenue hopes to collect in taxes through petroleum product in the current fiscal year.
Published in The Express Tribune, February 28th, 2012.