Govt says petroleum levy non-tax revenue

Federal Petroleum Minister Ali Pervaiz Malik on Thursday said the government was taking all possible measures to ensure uninterrupted petroleum supplies and reduce the impact of the global oil price shock on domestic consumers.

Briefing the National Assembly Standing Committee on Petroleum Division, he said the international petroleum market was facing an unprecedented crisis involving crude oil, refined products, shipping, insurance and refining capacity.

The meeting was chaired by MNA Syed Mustafa Mehmood.

The committee was told that higher shipping and insurance costs, longer transport routes and exceptionally high refining margins had significantly increased the international cost of petroleum products.

During the meeting, officials clarified that the petroleum levy was treated as non-tax revenue and was separate from customs duty and other taxes.

However, the committee noted that the levy was a significant component of petroleum prices.

It observed that the levy was initially intended to absorb fluctuations in petroleum prices but had later become a regular source of government revenue.

The chairman said members had the right to question the basis and justification of the levy.

He stressed the need for greater clarity about its impact on consumers.

Responding to a question, the Oil and Gas Regulatory Authority (OGRA) said the existing petroleum pricing mechanism was based on a transparent formula available on its website.