ISLAMABAD - Consequent upon interim order of the Supreme Court of Pakistan, the government on Tuesday revised the prices of petroleum products downward deducting carbon tax out of it.
As directed by the Supreme Court, the Oil and Gas Regulatory Authority late Tuesday night issued a notification to be effective from July 8 (today). According to the latest notification, the price of premium motor gasoline went down from Rs 62.13 to Rs 50.58 by Rs 11.55 per litre or 18.59 per cent. Similarly, the HOBC went down by 16.24 from Rs 78.78 to 62.54 with a decrease of almost 21 per cent. Kerosene oil having least amount of the carbon tax at the rate of Rs 6 per litre had the least advantage as compared to other products. Kerosene was slashed by Rs 6.36 from Rs 59.35 to Rs 52.99 per litre. Although, the diesel was not part of the OGRA notification, the officials said its price has also gone down by roughly Rs 9 per litre.
According to notification of the OGRA dated June 30, 2009, the carbon tax was imposed at premium motor gasoline @ Rs 10 per litre, Rs 8 per litre on diesel, and Rs 6 per litre on Kerosene. Since the apex court has suspended the imposition of the carbon tax till the final judgment in this case, the government was bound to withdraw carbon tax immediately, an official said.
The government was in a fix after the interim order of the court as it had already abolished petroleum development levy, the predecessor of the carbon tax. According to the official who requested anonymity, there was a panic situation in the Ministry of Petroleum and Natural Resources after the interim order as the Advisor to Prime Minister on Finance Shaukat Tarin and Finance Secretary were abroad to attend IMF meeting in Turkey. Since it is the issue of taxation, the Finance Ministry was supposed to find a way out.
According to the official, this immediate implementation of the court’s interim order would definitely provide relief to the public but would also pile up the price differential claim of the Oil Marketing Companies (OMCs).
The official said that the government was determined to fight the case of carbon tax in the apex court. He said that the government was having no fiscal space to pay the price differential claim to the OMCs. He also pointed out that the carbon tax was to generate Rs 122 billion or more depending upon the volume of sale during the year. The official however admitted that the petroleum products were being subjected to double taxation as the General Sales Tax was being levied after including the carbon tax in the taxable sale price.
As directed by the Supreme Court, the Oil and Gas Regulatory Authority late Tuesday night issued a notification to be effective from July 8 (today). According to the latest notification, the price of premium motor gasoline went down from Rs 62.13 to Rs 50.58 by Rs 11.55 per litre or 18.59 per cent. Similarly, the HOBC went down by 16.24 from Rs 78.78 to 62.54 with a decrease of almost 21 per cent. Kerosene oil having least amount of the carbon tax at the rate of Rs 6 per litre had the least advantage as compared to other products. Kerosene was slashed by Rs 6.36 from Rs 59.35 to Rs 52.99 per litre. Although, the diesel was not part of the OGRA notification, the officials said its price has also gone down by roughly Rs 9 per litre.
According to notification of the OGRA dated June 30, 2009, the carbon tax was imposed at premium motor gasoline @ Rs 10 per litre, Rs 8 per litre on diesel, and Rs 6 per litre on Kerosene. Since the apex court has suspended the imposition of the carbon tax till the final judgment in this case, the government was bound to withdraw carbon tax immediately, an official said.
The government was in a fix after the interim order of the court as it had already abolished petroleum development levy, the predecessor of the carbon tax. According to the official who requested anonymity, there was a panic situation in the Ministry of Petroleum and Natural Resources after the interim order as the Advisor to Prime Minister on Finance Shaukat Tarin and Finance Secretary were abroad to attend IMF meeting in Turkey. Since it is the issue of taxation, the Finance Ministry was supposed to find a way out.
According to the official, this immediate implementation of the court’s interim order would definitely provide relief to the public but would also pile up the price differential claim of the Oil Marketing Companies (OMCs).
The official said that the government was determined to fight the case of carbon tax in the apex court. He said that the government was having no fiscal space to pay the price differential claim to the OMCs. He also pointed out that the carbon tax was to generate Rs 122 billion or more depending upon the volume of sale during the year. The official however admitted that the petroleum products were being subjected to double taxation as the General Sales Tax was being levied after including the carbon tax in the taxable sale price.