ISLAMABAD: The government has projected to collect Rs76 billion in additional revenue if it maximizes oil levy at Rs50 per liter on all petroleum products in the remaining five months (February-June) based on current fuel consumption and international oil prices.
This was revealed to the Business Recorder by well-placed sources in the Petroleum Directorate.
Oil levy on petrol has already been raised to Rs 50 per liter from November 2022. However, the estimated revenue impact if the current rate of Rs 35 PL on high-speed diesel (HSD) is increased by Rs 15 to Rs 50, the government will generate Rs 15 billion every month or Rs 75 billion by the end of the current financial year.
The increase in PL on the other two petroleum products – kerosene oil (SKO) and light diesel (LDO) will generate an estimated revenue of Rs 1 billion (Feb-June 2022-23), as the consumption of these two items in the total petroleum products is no more than 0.4 percent. Currently, Rs 6.22 per liter PL is charged at SKO and Rs 30.45 per liter at LDO.
Sources said the government expects little change in petroleum consumption for the next five months based on the trend seen in the first six months of the current fiscal year.
On Tuesday, the Oil Companies Advisory Council (OCAC) released comparative figures for July-December 2021 and 2022 petroleum sales: gasoline imports fell 27% to 2.624 million tonnes and HSD imports fell 38% to 1.285 million tons.
Brent crude has been forecast to average $89.37 a barrel in 2023 (today at $88.15 a barrel). Pakistan relies on importing 60% HSD and 80% gasoline to meet domestic consumption. The oil levy generated Rs 230 billion in the first half of the financial year, a Petroleum Department official told the Business Recorder on condition of anonymity – just 30% of the total budgeted PL target of Rs 750 billion for the current financial year.
“The final amount of actual PL for collection of POL products during the first half of the financial year will be released this month,” the official added.
The government, under emergency revenue measures, has agreed with the International Monetary Fund (IMF) to impose a sales tax on petroleum products (up to the normal rate of 17 percent) if a month’s revenue collection figures underperform.