Forces may feel fuel pinch even after supply resumes

Published: December 8, 2011
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Petroleum ministry proposes ban on export of petroleum products, resumption of jet fuel supply if Nato pays taxes.  PHOTO: AFP/ FILE

Petroleum ministry proposes ban on export of petroleum products, resumption of jet fuel supply if Nato pays taxes. PHOTO: AFP/ FILE

ISLAMABAD: 

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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Reader Comments (13)

  • Usman
    Dec 8, 2011 - 9:55AM

    GST free jet feul to NATO; another present to the nation.Recommend

  • S!D
    Dec 8, 2011 - 12:26PM

    Pakistan should have levied the taxes on the supplies to the Nato which is legal and a right of pakistan instead of asking for aid from the US.

    Recommend

  • Ishrat Salim
    Dec 8, 2011 - 12:43PM

    Enough is enough…..all goods destined for NATO & Afghans shud be taxed….this is overdue……

    Recommend

  • Dr.A.K. Tewari
    Dec 8, 2011 - 4:06PM

    Take tax and blood money and resume all supply to NATO . All supply to Afghanistan has to be resumed , as a land locked country, Afghanistan can not be denied its aproach to the sea coast by Pakistan . Its repercussions will be not bearable .

    Recommend

  • M Bilal
    Dec 8, 2011 - 4:19PM

    Will be great to see the numbers that we come up to, when calculate the total revenues that Pakistan allowed to forego since 2002. Policy makers did not realize we might have not needed any or atleast some of the American aid, had we not done so. Recommend

  • M Bilal
    Dec 8, 2011 - 4:24PM

    @Dr.A.K. Tewari: Those who have opted to come here by their own and also do not have any trust on us should be made to bear the repercussions. By the way, Pakistan is not the only country bordering Afghanistan and having sea coast . Why not let them try some other options?

    Recommend

  • Raj
    Dec 8, 2011 - 4:51PM

    Don’t worry about others! Worry about yourselves as you simply have too many problems on hand to deal with internally !! Leave the rest of the issues to others !!!!
    Lets see how you make it thru next few years !

    Recommend

  • jagjit sidhoo
    Dec 8, 2011 - 5:19PM

    Subsidized fuel for USA from Pakistan unbelievable !!!!

    Recommend

  • Bilal Hameed
    Dec 8, 2011 - 7:24PM

    @M Bilal: I have read a report that estimated the total loss in revenue during the past 9 years due to not imposing GST on fuel given to NATO at 3000 billion rupees. If you approximate $1 to be worth 100 rupees this amounts to $30 billion in lost revenues for the Nation.

    Hope this answers your question

    Recommend

  • Salim
    Dec 8, 2011 - 10:13PM

    NOTHING I mean NOTHING should be allowed to be exported or smuggled to Afghanistan.
    Afghanis are the most ungrateful and thankless people in the world.In addition all Afghanis should be thrown out of our country.Any other country sympathising with these people is most welcomed to take them.

    Recommend

  • Raj
    Dec 8, 2011 - 11:43PM

    @Bilal Hameed:
    So now you are suggesting that, That Nation whose reputation for managing basic Tax collection is seriously Questionable, should perhaps consider Taxing Goods in Transit ???
    Why don’t you start discussing payment of Taxes, Utility bills, Bank loans etc, first to the people of this Land of Pure ?
    No doubt that would certainly help solve some of the fiscal & monetary problems facing the Nation !!!!

    Recommend

  • Bilal Hameed
    Dec 9, 2011 - 1:08AM

    @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.

    Recommend

  • Raj
    Dec 9, 2011 - 2:20AM

    @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???

    Recommend

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