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Petroleum prices to remain unchanged

01 July, 2019

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ISLAMABAD: Petroleum prices will remain unchanged for the month of July as the government has made adjustments in tax rates, according to an official announcement.

The decision was taken to provide relief to the consumers, said a statement issued by the finance ministry. It said the government had decided not to increase the prices of petroleum products for July 2019.

However, the Federal Board of Revenue (FBR) earlier during the day issued a notification increasing the General Sales Tax (GST) on petrol and high-speed diesel (HSD) from 13pc to 17pc to absorb requirement for a price cut.

The crude price in the international market had come down from April’s $72 per barrel to $64 per barrel on June 28.

Based on standard 17pc GST rate (instead of 13pc notified rate for HSD and petrol), the Oil & Gas Regulatory Authority (Ogra) had recommended about 77 paisa per litre reduction in the price of petrol (motor spirit) and Rs2.94 per litre cut in kerosene price. It also proposed increase of Rs2.30 per litre and 26 paisa per litre in the rates of HSD and Light Diesel Oil (LDO), respectively.

With this arrangement, the existing rates of HSD, LDO, petrol and kerosene oil will remain at Rs126.82, Rs88.62, Rs112.68 and Rs98.46 per litre, respectively.

Besides the GST, the government has also been charging petroleum levy ranging between Rs14 and Rs18 per litre on petrol and HSD and Rs3 and Rs6 per litre on kerosene and LDO.

Petrol and HSD are two major products that generate most of the revenue for the government because of their massive and yet growing consumption in the country. The total HSD sales are touching 800,000 tonnes per month against the monthly consumption of around 700,000 tonnes of petrol, while the sales of kerosene oil and LDO are generally less than 10,000 tonnes per month.

The petroleum prices have been on the rise since early 2017 except for a couple of times when they were reduced.

The government has also notified increase in electricity and gas rates by 12 and 25pc respectively to become effective today (July 1).

The National Accountability Bureau (NAB) Rawalpindi on Monday filed a reference against PPP Senator Rubina Khalid, who was the senior/ex-chief executive of M/s Cosmos Production Pvt Ltd, according to a press release issued by the bureau.

Investigation officer Afshan Basharat filed the reference before an accountability court judge in Islamabad today.

The reference was also filed against Mazhur-u-Islam the former executive director of Lok Virsa, Islamabad and Dr Tabinda Zafar, who is the current chief executive director of Cosmos Production Prvt Ltd in Self Generated (SGF) of Lok Virsa.

According to the bureau, the evidence that was collected during the investigation had established that the accused had committed the "offence of corruption and corrupt practices as defined under Section 9 (a), (VI) and (XII) punishable u/s 10 of [National Accountability Ordinance (NAO)] 1999."

NAB said that during the investigation, it was established that Mazhar-u-Islam had misused his authority and illegally extended the contracts in favour of Cosmos Production "in connivance with" Senator Khalid and Dr Zafar.

Additionally, NAB said that Senator Khalid and Dr Zafar had "gained illegal benefits by getting the extension of [the] agreement without calling the fresh tenders/without any competition and also failed to deposit the 50 per cent profit earned by them."

They added that this had resulted in a loss of Rs30.13 million to the national exchequer.

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