FBR Announces Another Reduction in Sales Tax on Petrol

The prices of petroleum products in Pakistan have been soaring and the situation is worrisome for people from various socio-economic classes. However, the Federal Board of Revenue (FBR) announced a small reduction in the rate of sales tax on petroleum products yesterday.

According to the Statutory Regulatory Order (SRO) 1072(I)/2021, the sales tax on the supply of petrol has been reduced from 10.77 percent to 10.54 percent. Additionally, the sales tax rates for high-speed diesel, kerosene oil, and light diesel oil are 17 percent, 6.70 percent, and 0.2 percent respectively.


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The previous reduction in the sales tax was much greater as the rate had been brought down from 16.40 percent to 10.77 percent. The previous reduction in the sales tax had been announced by the FBR via SRO 937(I)/2021 on 26 July 2021.

Although the government claims to have reduced the sales tax on the supply of petroleum products to relieve the public, the prices of petrol have been on a gradual increase of late due to global increase in crude oil prices. While the prices of petrol and high-speed diesel remained the same, the petroleum division announced an increase in the prices of light diesel and kerosene oil on 16 August 2021.


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The Oil & Gas Regulatory Authority (OGRA) has been consistently proposing massive hikes in the price of petroleum products based on the international oil rates, and after the recent turbulence in the rates of petroleum products, the public is eagerly awaiting the government’s next announcement about fuel rates.