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Regulatory duty on crude oil import increased to minimise revenue shortfall

Regulatory duty on crude oil import increased to minimise revenue shortfall

ISLAMABAD: The government increased on Thursday regulatory duty on import of crude oil and its major products with immediate effect to minimise shortfall in revenue collection faced by the Federal Board of Revenue.

The decision coincided with a move to keep the prices of petroleum prices unchanged for May with adjustments in tax rates.

At a meeting of the Economic Coordination Committee (ECC) of the cabinet, the FBR had sought an increase in regulatory duty on crude oil, furnace oil, petrol and high speed diesel (HSD).

Also read: Asian imports of Iranian crude oil rise 20pc in 2014




The ECC allowed an increase of 2 to 8 per cent from the current 6pc in regulatory duty on crude oil, petrol and furnace oil by making amendments in the customs schedule.

It also allowed a 2.5pc hike in regulatory duty on HSD to 10pc from 7.5pc. The increase will take effect on June 1.

The decision will have an additional impact of Rs2 billion in June because duties on oil imports have an effect of about a month.

“The step is aimed to recoup some of the revenue losses due to persistent fall in petroleum products during the current financial year,” said the finance ministry.

Oil prices kept unchanged

Separately, the government decided to keep the prices of all petroleum products unchanged for May, despite Rs1 and Rs1.06 per litre reduction in petrol and diesel rates proposed by the Oil and Gas Regulatory Authority.

Finance minister Ishaq Dar said the government had decided to maintain the prices. After the adjustments in sales tax and petroleum levy, the prices would remain unchanged for the next month, he said.

Mr Dar said that because of change in prices of petroleum products in the international market, Ogra had recommended an increase in the prices of high octane by Rs9.43, kerosene by Rs2.11 and light diesel oil by Rs3.38 per litre.

Ogra had also recommended a decrease in the prices of petrol by Re1 to Rs73.29 and HSD by Rs1.06 to Rs82.55 per litre.

But the prime minister decided to keep the prices of all petroleum products unchanged.

Published in Dawn, May 1st, 2015

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