Sources said that the Federal Board of Revenue (FBR) maintained the rate of General Sale Tax (GST) at 17 percent on all the POL products at the level of previous month of September. However, the FBR issued notification in this respect. Sources further claimed that the government has made upward adjustment in the rates of petroleum levy for the month of October after keeping the rate of petroleum levy reduced for the month of September.
"The decision to retain the September prices of petroleum products for the upcoming month of October has been taken in view of the petroleum prices in the international market showing increasing trend from mid-September 2019 and the expectation that the prices might remain on the higher side in the month of November 2019", Finance Division states.
The government has decided to maintain the prices of petroleum products at the current level to offset expected increase in the prices for the month of November 2019. On Saturday, the Ogra recommended the government to reduce the prices of petroleum products following reduction in the prices in the international market.
As per the summary Ogra has recommended that prices of High Speed Diesel (HSD) may be reduced by Rs 3.23 per litre (2.5 per cent), petrol by Rs 2.55 per litre (2.3 percent) and Light Diesel Oil (LDO) by Rs 2.41 per litre (2.6 percent). However, oil and gas regulator has proposed that the price of Super Kerosene Oil (SKO) should be increased by 1.19 per litre (1.2 percent) for current month.
The government had earlier increased (GS) on all petroleum products to standard rate of 17 percent across the board to generate additional revenues.
For current month, the government, however, has doubled the rate of petroleum levy on HSD to Rs 20.76 per litre instead of Rs8 per litre, while levy on petrol had also been increased to Rs 17.18 per litre instead of Rs10 per litre. The petroleum levy on kerosene oil has reduced to Rs 4.98 per litre from Rs6 per litre but increased to Rs 5.06 per litre from Rs3 per litre on LDO. The petrol and HSD generates most of revenue for the government because of their massive consumption in the country.
Brent crude oil prices will average $65.15 per barrel in 2019 and $ 62 per barrel in 2020 according to the most recent forecast from the US Energy Information Administration's monthly short term energy outlook.
On September 16, attack on two Saudi major oil facilities suspended the supply of fuel. The damage caused is significant and oil prices saw their biggest jump in 30 years rose by nearly 15 percent. Despite this, Saudi Arabia says oil production will resume as normal by the end of September.