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  • Jun 22nd, 2018
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Supreme Court (SC) on Thursday took exception to incessant taxation on petroleum products and summoned Federal Board of Revenue chairman, Secretary Ministry of Petroleum and Managing Director (MD) Pakistan State Oil (PSO) to appear on Friday (today) in the hearing of the case regarding the formula to determine the prices of petroleum products and taxation on them.

At its Karachi Registry, the SC's bench headed by Chief Justice of Pakistan (CJP) Mian Saqib Nisar stated that continuous taxation on petroleum products has made the people insane. The apex court declared all those involved in such acts are answerable.

The court also sought the record of the last six months' import of petroleum products, their auction and mechanism to determine their prices in the domestic market. It observed whole process of imports of petroleum products seemed to be dubious.

Earlier, PSO's deputy managing director (DMD) Yaqoob Sattar informed the court about the price mechanism of petroleum products. However, the SC bench expressed disappointment over his briefing and summoned PSO'S MD to appear before the court on Friday along with Secretary Petroleum Ministry and FBR chairman to apprise the court of the mechanism to determine the prices of petroleum products and taxation on them.

PSO's DMD told the court that 266.6 million litres of petroleum was imported during the last six months. Petrol was imported from the seller who sold it to us at the lowest rate at Rs 62.38 per liter. He said 9.8% levy is charged on per liter of petrol whereas 3.83 percent IFEM is levied on per liter of gasoline. The share of oil marketing companies is 2.55 percent whereas the commission of dealers is 3.35 percent on per liter, he stated, adding that 15 percent sales tax was imposed on petrol on May 01 this year. He said petrol is available at Rs 91.96 per liter these days.

The apex court also inquired about the interest paid on the loans taken from the banks. The PSO representatives informed that Rs 7 billion are paid as interest each year on the loans amounting to Rs 95 billion. Different organizations owe Rs 300 billion to PSO, he said.

The CJP remarked there are complaints that PSO and OGRA raise the prices of petroleum products in collusion and vowed to make all those accountable who jack up the prices and impose the taxes unjustly on petroleum products.

Karachi Mayor Wasim Akhtar complained that charging the transportation cost from the consumers of Karachi is unjust because Karachi is port city. On the submission of Wasim Akhtar that price of petrol is same in Karachi and Peshawar despite the fact that former is a port city, Chief Justice responded that court is working to provide relief to the masses. He said the court would issue orders after reviewing the matter thoroughly.

The apex court appointed Advocate Faisal Siddiqui as its amicus curiae to assist it for fixing the prices of petroleum products. It directed him to furnish the report about the formula of fixing petroleum products by working with OGRA.

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