The government on Monday hiked the cost of liquefied petroleum gas (LPG) amid large shortfalls in revenue by around 11% but the prices of other petroleum products stayed the same for October and are projected to rake more than Rs. 4.2 billion in windfall revenue over lower international prices.
While the Oil and Gas Regulatory Authority (Ogra) had suggested slashing the price of petroleum products by up to 2.6% due to a decline in international oil prices, the government decided to rake more revenue due to shortfall in revenue target during the first quarter.
It is worth pointing out that the government didn’t pass the relief for lower global oil prices to citizens considering that the prices will rise next month after the attack on Saudi Oil Facility. The Ministry of Finance in a statement said,
The government has decided to maintain the prices of petroleum products at the current level to offset expected increase in the prices for the month of November 2019.
The finance ministry added that the “decision to retain the September prices of petroleum products for the upcoming month of October has been taken in view of the petroleum prices in the international market showing increasing trend from mid-September 2019 and the expectation that the prices might remain on the higher side in the month of November 2019.”
A different notification would be released by the federal board of revenue to hike tax rates that at present stand at a standard rate of 17% across the board. Aside from the 17% GST the government has more than doubled the petroleum levy on HSD and levy on petrol by more than 50% but levy on kerosene oil and LDO remains unchanged.