Burning issues: Sales tax on petroleum products may be reduced

Minister says consultations with provinces under way, govt considering proposal to review fuel prices fortnightly.


Zahid Gishkori May 11, 2012

ISLAMABAD:


Fuel and fuel prices dominated the Senate question hour on Thursday with the petroleum minister informing lawmakers that the government is considering reducing sales tax on petroleum products and revising fuel prices on a fortnightly basis.


Petroleum Minister Dr Asim Hussain said the government intended to reduce the general sales tax (GST) on petroleum products and consultations were under way with provinces in this regard.

“The purchase cost of petrol is Rs67.71 per litre while the consumer price is Rs87.75,” he said.

“Diesel is purchased at a rate of Rs73.1 and the consumer price is Rs95.78 per litre,” he added.

Responding to a query by Muttahida Qaumi Movement Senator Col (retd) Tahir Hussain Mashhadi, the petroleum minister said that 70% out of the total GST collected went to the provinces while 30% of it went to the centre.

Reviewing fuel prices

The petroleum minister informed the House that the government is finalising a new pricing mechanism and working on a proposal for revising oil prices on a fortnightly basis to solve the issue of sudden rise in prices.

He informed the Senate that the Economic Coordination Committee (ECC), on the request of the petroleum ministry, was likely to take up the proposal this month. He also said that the ECC would revise oil prices on a fortnightly basis in the wake of abrupt rise in the international market.

Awami National Party (ANP) Senator Ilyas Bilour asked why the government was increasing fuel prices, despite a fall in international crude oil prices.

“The government drops a petroleum bomb every month to add to the miseries of poor people,” he said. The petroleum minister also said the government shielded refineries from losses caused by frequent fluctuations in global prices of crude oil.

IP gas pipeline

In response to a query by Senator Talha Mehmood of Jamiat Ulema-e-Islam, Dr Asim admitted that there were some hurdles in the way of early completion of the Iran-Pakistan gas pipeline project but did not elaborate further.

“Work on the Iran-Pakistan gas pipeline project is in progress and will be completed by 2014,” he said, adding that the project would help lessen gas shortages.

Refineries in K-P

The petroleum minister also informed the Senate that negotiations between Pakistan State Oil and the Khyber-Pakhtunkhwa government were under way for the establishment of refineries in the province, a move which would help reduce shortage of gas in the province.

The minister said that a $2.5 billion project was under way for drilling 500 exploratory wells in Sindh.

Published in The Express Tribune, May 11th, 2012.

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