New petrol prices mechanism: MPNR
Islamabad: Petroleum Ministry has recommended the Economic Coordination Committee (ECC), to mechanize the review of petroleum products prices on quarterly basis, and to end 7.5 per cent deemed duty on high-speed diesel ostensibly refineries failed to upgrade its system for producing petroleum products as per international standards.
The country is failing to meet international standards in the production of petroleum products, according to the Ministry of Petroleum and Natural Resources (MPNR).
Besides asking to end 7.5 per cent deemed duty on high-speed diesel, the ministry has recommended reducing and fixing the general sales tax (GST) on petroleum products in terms of absolute per litre price.
Also, Petroleum Levy worth Rs220bn may be used as price stabilising factor rather than a source of revenue.
“GST on petroleum products may be reduced and fixed in absolute Rs/litre terms. It can be a stabilising factor rather than source of revenue.
Some of the refineries are not fulfilling their commitment for setting up the expansion and upgrading of their plants despite incentives given to them,” according to sources.
It is reported that the OMCs were found willing to implement the PIDE recommendations.
The petroleum ministry revealed that deregulation of OMCs and dealers’ margin on petrol for a trial period of up to six months can be done, the dealers would be bound to display both OMCs and dealers margin clearly at their outlets that, however, would be strictly monitored by the Oil and Gas Regulation Authority (Ogra) and the respective OMC.
Moreover, the Federal Board of Revenue (FBR) would provide a detailed mechanism, particularly on tax collection for OMCs and dealers.
He added that OMCs and dealers margins on high-speed diesel were proposed to increase by Rs0.16 and 0.40 per litre respectively.