The discussion on the petroleum levy has been going on for several months in speculation of the impact that it will have on the prices of petrol upon being increased. The questions surrounding it will soon be answered as the government has announced a revision in the rates of the levy on petroleum products.
The new petroleum levy rates are as follows:
Experts suggest that the elevated petroleum levy rates are intended to expand the margin between the prices of petrol and Compressed Natural Gas (CNG), increase the revenue for the petroleum division, and reduce the import bill.
As per previous reports, the government had set a target of Rs. 610 billion petroleum levy collection at the beginning of FY 2021-22. Despite this, the actual collection did not amount to more than Rs. 25 billion in the initial two and half months of the first quarter of FY 2021-22.
The low petroleum levy had also kept the petroleum product prices low in the second and third quarters of the 2021 calendar year whereas the prices of CNG had been surging due to a hike in the Liquified Natural Gas (LNG) rates.
The Chairman of the All Pakistan CNG Association (APCNGA), Khalid Latif, said, “The surging prices of CNG have undermined its attraction as a fuel of choice for the local consumers”.
This is why the current move is also aimed at encouraging the use of CNG to keep the sector afloat.
The increase in the petroleum levy is likely to contribute more to the skyrocketing prices of petroleum products in the future, meaning that the Pakistani public is in for a tough time with managing its fuel expenses.
