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Government to cut duties, profits on POL: Qamar

Staff Report

KARACHI: The government has decided to phase out custom duties on petroleum products in a move to prevent masses from the effect of subsidy reduction in the future, Federal Minister on Finance Naveed Qamar said.

He was briefing media after meeting with the representatives of Oil Companies Advisory Committee (OCAC) and All Pakistan Petroleum and CNG Dealers Association here Monday.

He said the government has decided to reduce the profit margins of Oil Marketing Companies (OMCs), refineries and dealers on the sale of petroleum products.

“The government is considering to fix their margins in order to avoid further shifting of burden on the masses, but the prices of POL will not decline at the retail level because the government is still paying Rs 35 per litre subsidy on diesel,” he added.

Qamar said the government is also considering to merge diesel subsidy in 16 percent General Sales Tax (GST) levied on each litre.

He said Economic Coordination Committee (ECC) would grant the final approval on these decisions in its forthcoming meeting, adding the committee will also disclose the new prices mechanism in the same meeting.

Minister of Finance said the government is holding negotiations with all the stakeholders particularly OMCs.

He mentioned that government owes Rs 140 billion as Price Differential Claims (PDC) on diesel. But the government will not resort to the policy of relying on central bank borrowing for discharging these claims.

Regarding regulations related to Compress Natural Gas (CNG), he said the Oil and Gas Regulatory Authority (OGRA) will announce a new uniform CNG price through out the country and will regulate this sector in the future.

Answering a query, he said the cabinet has prepared a summary on National Finance Award (NFC) with the consultation of all four provinces and it will be sent shortly to the President for final approval.

Minister said the international financial institutions have restored their trust in Pakistan as the delegation of World Bank (WB) will be coming in Pakistan next month to lend $500 million aid.

He added the government has chalked out strategy to confront wheat crisis and it would import 2.5 million tonne wheat to fulfill the demand of the country.

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