Years old, heavy government taxes on petrol now have
come under strong criticism by the economists, industrial circles as
well as general public. Over 125 percent government levies have forced
retail petrol rates at Rs. 37.02 while its ex-refinery rate per liter is
only Rs. 16; while the HOBC with the ex-refinery rates of 16.50 per
liter is being sold at a retail price of Rs. 40.97 per litre.
Apart from Rs. 0.88 Excise Duty and Rs. 5.00 as Sales
Tax there are Rs. 10.00 to Rs. 13.00 as Petroleum Development Levy on
both the super quality and HOBC. The petroleum levy about 100% was
imposed years ago in order to build a cushion for consumers as petroleum
prices were revised in past after every year especially during annual
budgets. Fluctuation in import prices used to be adjusted with the
levies amount. Government earned billions of rupees through Petroleum
Development Levy during last two decades and was supposed to reduce the
levy whenever import prices goes up. Not only this but government was
supposed to even give subsidy from the levy amount in order to keep POL
prices within the reach of the citizens.
If government had given a slight subsidy from the
Petroleum Development levy collected during last two decades, citizens
could have easily bought petrol only at the rates of Rs. 15.00 per litre,
which is being sold at the rate of Rs. 37.20
The questionable Petroleum Pricing Mechanism has
increased the prices of all products of daily use especially power and
However, Petroleum Development levy on diesel is
lower than super, which resulted retail prices at Rs. 24.47, it may be
mentioned that diesel's ex-refinery prices per liter are also about Rs.
14.36. Government has exempted diesel from Excise Duty and Sales Tax
since last year after aggressive protest from the transporters and wheel
Ridiculously, the Oil Marketing Companies (OMC)
operating in Pakistan, Oil Companies Advisory Committee (OCAC) and
Federal Government is refusing to talk about the heavy government levies
and taxes. All of these institutions refuse to even meet the media
people in this regard. One of the official from OCAC on the condition of
unanimity said that the OCAC, and Oil Marketing Companies have been
instructed by the government to keep the levy detail secret. Not only
this but some officials are busy with confusing citizens with minor
factors, like demand and supply situation, traders margin, freight
charges, difference of oil transportation through dirty tankers and
clean tankers and inland transportation charges etc. They are trying to
befool the citizens with the jugglery of words over above issues and
completely neglecting the one of the most important factor of heavy
government levies being collected in billions of rupees since last two
Being an essential product in all over the world,
petroleum products prices are kept lower in order to strengthen the
national economy and industries, but here the situation is just
Apart from transporters not a single circle including
petroleum dealers, political parties, industrialists have come up with
firm stand on this issue so far. Major political parties are ignoring
this sensitive issue because heavy taxes on petrol remained one of the
major sources of money minting for them during their regimes.
The most important and sensitive essential item has
been given in the hands of OMCs and OCAC under the cover of deregulation
following which Federal Government and Oil Companies are minting money
at the cost of sharply increasing poverty level.
Since last two years more Oil Marketing Companies are
arriving in retail business as the government has declared Pakistan as
an open field to mint the money in petrol business.
In Karachi the state-run Pakistan State Oil is
loosing market share in a result of aggressive marketing by Shell
Pakistan. Although PSO has 153 outlets in Karachi while Shell has 104
outlets. Caltex oil is upgrading the outlets to capture more retail
share with its 66 outlets in the city.
All over Sindh, PSO has more than 727 outlets, Shell
has 305 and Caltex 132, but retail sale of Shell is higher than PSO. In
Punjab PSO has 2,170 outlets and Shell has 710, Caltex has 241, Attock
Petroleum and Total PARCO Pakistan 15 and 8 respectively. In Sindh, both
new Oil Marketing Companies Total and Attock have opened new outlets in
the good locations.
PSO has more than 3,838 outlets in Pakistan including
Azad Jammu and Kashmir, Shell Pakistan has more than 1,269, Caltex has
466, Attock Petroleum has 29 and Total PARCO has more than 12 outlets.
Nation was also deprived of a major relief in the
shape of grant given by the Saudi Kingdom, which started after nuclear
tests during Mian Nawaz Sharif's government. Relief in petroleum prices
not given till today, however, government kept POL prices under control
for political reasons during the months of presidential referendum and
US attack on Afghanistan and Iraq. Sources said that government adjusted
the loss from the levies collected during last two decades.
Early this year, provincial ministers for transport
and home department had taken this issue in the Federal Capital after
law and order situation erupted on POL prices in Karachi. But they
returned with the instruction that they should never interfere into the
POL prices in future. Political parties too are afraid of this issue and
do not even comment whenever POL price issue is raised by the citizens.