Forces may feel fuel pinch even after supply resumes

Petroleum ministry proposes ban on export of petroleum products, resumption of jet fuel supply if Nato pays taxes.

Zafar Bhutta December 08, 2011


As Afghan-bound Nato oil trucks while away, the government is mulling imposing a permanent ban on export of locally-produced petroleum products, except jet fuel.

Export of jet fuel, however, will be allowed if Nato agrees to pay all applicable duties to Pakistan.

The country has been exporting petroleum products to Nato forces in Afghanistan, exempted of all duties including the general sales tax (GST) and petroleum levy, since 2002. The supplies were made through the US Defence Energy Supply Company.

The petroleum ministry has moved a summary to the Economic Coordination Committee (ECC) of the Cabinet, scheduled to meet on Friday, seeking a permanent ban on export of locally-produced fuels including petrol and diesel, sources told The Express Tribune.

The ministry has also proposed that export of other locally-produced products be allowed if Nato forces pay complete duties applicable in Pakistan. Sources said that the commerce ministry and the Federal Board of Revenue (FBR) had also supported the ban because petroleum products were being dumped in Khyber-Pakhtunkhwa.

Surplus jet fuel

Secretary Petroleum Ijaz Chaudhry confirmed that the summary has been moved, citing the shortage of petroleum products in the country.

“However, we have proposed that there should be no exemption of duties on export of [jet fuel] JP-1 and JP-8,” sources said.

Since Afghan-bound cargo uses Pakistan’s infrastructure, Nato should pay duties, sources said, adding that the country had surplus stock of jet fuel and therefore resumption of its export was being proposed.

Exporting to local Afghans

Meanwhile exporters have approached the petroleum ministry, asking for the ban to be lifted.

Claiming they bring foreign exchange into the country, suppliers say export of locally-produced petroleum products to Afghan consumers, not Nato forces, should be allowed.

“The ministry of petroleum has asked oil exporters to work out the economics of exporting to local consumers in Afghanistan,” sources said.

Published in The Express Tribune, December 8th, 2011. 

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Raj | 9 years ago | Reply

@Bilal Hameed: Yes , i am well aware of the fact too ! However are you actually suggesting that Pakistan has never benefited out of this arrangement ??? Are you actually privy to these deals, which are not in public domain??? Trust me , i have tried to obtain, this info for years ,and have always hit blank walls. The track record suggest that Pakistani elite in both Army & Govt are definately being paid for services rendered here !!!! What is surprising is that the people of the nation are only now questioning this position after a decade!!! Why has it taken them so long, to even make noises??? Have they even considered to ask the very questions to their own rulers???

Bilal Hameed | 9 years ago | Reply

@Raj: Transit duties are charged the world over this is not something that I am coming up with. Egypt for example charges transit duties for the cargo that passes through the Suez Canal.

Do you want to say that Pakistan does not have the right to charge Transit duties ?

If I go by your argument then we should stop collecting all taxes since the nations reputation for managing tax collection is poor.

I agree that we have corruption in tax collection and management, but that always benefits the companies as they pay bribes to the corrupt officers to evade taxes and hence avoid paying full taxes.

Lastly we do not need advice from Indians about what to do and what not in our country. Who should pay taxes and on what should be decided by Pakistanis and Pakistanis alone.

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