Govt increases GST on petroleum products to 22%

[BetterPakistan]

Sir I don't know any country in the world besides Pakistan who reduced the prices of Petrol as much as we did. It could be due to fear factor of anarchy march or the government not having proper mechanism to control prices.

In UK, when the price of oil was around 110 dollars per barrel we used to get petrol for about £1.35 per litre
Now the price is 55 dollars per barrel and we are getting petrol for £1.15 per litre

so only 20p discount and that too after reducing 1p after few days and so on so forth. At similar price many years ago, we used to get petrol for £75p a litre.

The UK government can still do it but they are not doing it... Check out the regional prices of Petrol around Pakistan and you learn the bitter fact that we are selling petrol for the cheapest price in the whole region.

and I do agree that the government must tax everybody and not put burden on single sector

Brother you compared Pakistan with UK without thinking that in Pakistan the minimum wage for entire month is RS 12,000 but mostly people get paid Rs 7-8,000 while in UK many people easy makes this much in 2 days Isn't it? In UK everybody is taxed while in Pakistan only poor get taxed Isn't it? My point is that instead of increasing petrol prices government should tax the rich. Brother if you search you will find that a lot of countries has reduced petrol prices to 40%+ like USA, Canada etc while in Pakistan who produces more than 20% of its oil itself, is a poor country, has just reduce the price of oil about 27%. Government makes 35% of its electricity through oil and government just reduced the price of electricity about 2.+ RS from Rs 12 each unit and the price of each unit of electricity increases with as much as you use. There are lots of other things to see as well Sir.

 

[PakGuns]

It is a good idea, since the prices of oil are coming down, the government must take it as an opportunity and try to make up for the losses they incurred since past many years due to high oil prices. Raising GST is fine as the public wouldn't know since they are getting 20-40% cheap oil as compared to couple of months ago.

When I was in Pakistan, the price of petrol was hovering around 111-113 rupees per litre and now it has come down to 78 rupee per litre. If the government can raise GST and even if the price goes as high as 85... The common man will still be happy for seeing the price that was many years ago.

Just 1 rupee per litre of extra income could generate billions of extra income for the government I guess which can be used for the welfare of the people (barring corruption)

But for how long is oil going to be priced at 78/lit? the internatinal price.won't end up at 40$/barrel for longer....

 

[Kabira]

Brother you compared Pakistan with UK without thinking that in Pakistan the minimum wage for entire month is RS 12,000 but mostly people get paid Rs 7-8,000 while in UK many people easy makes this much in 2 days Isn't it? In UK everybody is taxed while in Pakistan only poor get taxed Isn't it? My point is that instead of increasing petrol prices government should tax the rich. Brother if you search you will find that a lot of countries has reduced petrol prices to 40%+ like USA, Canada etc while in Pakistan who produces more than 20% of its oil itself, is a poor country, has just reduce the price of oil about 27%. Government makes 35% of its electricity through oil and government just reduced the price of electricity about 2.+ RS from Rs 12 each unit and the price of each unit of electricity increases with as much as you use. There are lots of other things to see as well Sir.

But international oil price is same for everyone thats why Pakistan is poor country. Anyway just compare Pakistan petrol prices with regional countries like Afghanistan, China, India, etc In Pak on average petrol is at least 20% cheaper.

 

[Cheetah786]

Somewhat off topic: When did Pakistan implement it's GST? How were the provincial governments compensated for the loss of revenue? Was it politically contentious?

I'm asking because, as you might know, India has struggled to push through it's GST. At the absolute earliest, we are looking at implementation by FY 17.

Goods Sales Tax Rate | Sales Tax 2006-2014
The Sales Tax Rate in Pakistan stands at 17 percent. Sales Tax Rate in Pakistan averaged 15.78 Percent from 2006 until 2014, reaching an all time high of 17 Percent in 2014 and a record low of 15 Percent in 2007. Sales Tax Rate in Pakistan is reported by the Federal Board of Revenue, Government of Pakistan.

While indian governemnt is trying to harmonize the Gst (goods and service tax) with all parties,making it simple to file and collect . Which is good for the economy. I think your sales tax rate is 12.36 percent ,but some states are higher and some are lower .

 

[xyxmt]

Reducing prices is one thing but reducing so much is another.

During PPP tenure the prices of oil were always sky-rocked a part from 1 blips when the oil prices were down to $40 dollars per barrel but soon only to rise once again and keep the government under pressure. It is for the first time the prices of oil has been reduced and likely to remain low

dude we have never seen this much drop in oil prices so off course no one has seen this much drop in prices even here in canada. Are Canadian price drop is due to IK's dharna...get real man, argument for the sake of argument

 

[ziaulislam]

PML N govt has revolutionized the taxation. which is now very easy. GST accounts for more than half of total taxations and govt now simply collects more than 50% of all GST on oil products...so its easy both for poor public and our tax authority.!..

GST is the best type of tax as it based upon equal rights both poor and rich people pay the same !

 

[HariPrasad]

Govt increases GST on petroleum products to 22%

The rise in GST will effectively deprive consumers of an estimated Rs 5bn worth of relief after oil prices fell in the international market.—File photo

ISLAMABAD: The federal government on Tuesday increased sales tax on petroleum products by five per cent, effectively depriving consumers of an estimated Rs5 billion worth of relief following the fall of crude oil prices in the international market.

The increase in GST on some petroleum products was announced through a notification issued today by the Federal Board of Revenue (FBR) on the advice of the Finance Ministry.

According to the notification, a copy of which is available with DawnNews, sales tax will be charged at the rate of 22 instead of 17pc on High-speed Diesel oil, Light Diesel Oil, Kerosene, and Motor spirit including HOBC.

The notification shall take effect from Jan 1, 2015.

Crude oil prices have fallen sharply in the international market since late June, losing around 30pc as supplies increase and global demand for oil grows more slowly.

The measure to increase GST on the petroleum products was taken by the government to partially offset a shortfall in revenue of the FBR after the decline of oil prices in the global market.

Sources said the decision was taken after Finance Minister Ishaq Dar held a series of meetings with the ministries of finance and petroleum, Oil and Gas Regulatory Authority (Ogra) and FBR to find ways of retaining some of the reduction in oil prices instead of passing on full benefit to consumers.

Sources say the monthly impact of reduction in oil prices was Rs1-3bn, but the real cause of concern was the government’s loss on account of windfall revenue loss on crude, which normally yielded Rs30-35bn every year as a result of higher international price.

Govt increases GST on petroleum products to 22% - Pakistan - DAWN.COM

A right step in right direction. In a time when the petroleum prices are falling, this is the right time to increase the duty and generate some additional revenue.

 

[BetterPakistan]

But international oil price is same for everyone thats why Pakistan is poor country. Anyway just compare Pakistan petrol prices with regional countries like Afghanistan, China, India, etc In Pak on average petrol is at least 20% cheaper.

In many countries oil price have reduced to even 50% consider it man. The govt is doing it to pay a lease to IMF.

 

[Pakistani patriot]

Sources say the monthly impact of reduction in oil prices was Rs1-3bn, but the real cause of concern was the government’s loss on account of windfall revenue loss on crude, which normally yielded Rs30-35bn every year as a result of higher international price.

Govt increases GST on petroleum products to 22% - Pakistan - DAWN.COM

Is this about the crude that Pakistan was exporting?

 

[WishLivePak]

Sir I don't know any country in the world besides Pakistan who reduced the prices of Petrol as much as we did. It could be due to fear factor of anarchy march or the government not having proper mechanism to control prices.

In UK, when the price of oil was around 110 dollars per barrel we used to get petrol for about £1.35 per litre
Now the price is 55 dollars per barrel and we are getting petrol for £1.15 per litre

so only 20p discount and that too after reducing 1p after few days and so on so forth. At similar price many years ago, we used to get petrol for £75p a litre.

The UK government can still do it but they are not doing it... Check out the regional prices of Petrol around Pakistan and you learn the bitter fact that we are selling petrol for the cheapest price in the whole region.

and I do agree that the government must tax everybody and not put burden on single sector

This.

Canada produces so much oil, yet we pay 90 rupees a liter...

 

[SBD-3]

Somewhat off topic: When did Pakistan implement it's GST? How were the provincial governments compensated for the loss of revenue? Was it politically contentious?

I'm asking because, as you might know, India has struggled to push through it's GST. At the absolute earliest, we are looking at implementation by FY 17.

I think you're confusing GST with VAT.

 

[Muhammad Omar]

Still with the Increase of GST from 17% to 22% the Petrol Price will reduce 6.25 Rupees... coming down to 77 rupees... Lowest in 6 years... if they didn't increased the GST then the reduction would have been 9-11 Rupees...

 

[Hyde]

This.

Canada produces so much oil, yet we pay 90 rupees a liter...

Sir what is the point of comparing oil-rich nation Canada with oil-deprived nation Pakistan?

Canada has world's third largest oil reserves behind only to Saudi Arabia and Venezuela. They fulfil oil demand locally and amongst the world's top oil-exporting nations. They produce more than they consume so they can afford to sell oil cheaply... Canada is still expensive when you compare their rival Venezuela and Saudi Arabia selling oil many times cheaper than Canada.

But in Pakistan's case we are oil-deprived nation with only 20% local production at peak with fear of soaking up local oil reserves sooner than later and rest of the 80% demand is being fulfilled by importing oil from other nations. The cost of production at local market is obviously way lower than cost of import from oil-rich nations.

You simply cannot compare the two... The closest nation to compare Pakistan's oil demand and supply is the other South Asian countries such as India, Bangladesh and Sri Lanka. Canada should be compared with oil rich countries like Saudi Arabia, Venezuela, Iran and Iraq etc.

 

[nair]

I dono Why we Indians and Pakistanis fight every time.... Look at this news..... Indian Govt also did exactly the same few days back...... Smart buggers are playing with taxes at a time people may not take it seriously and may not get the impact..... But once the crude oil prices go back to 100 dollars+, that is the time you will know the implications......

 

[WishLivePak]

Sir what is the point of comparing oil-rich nation Canada with oil-deprived nation Pakistan?

Canada has world's third largest oil reserves behind only to Saudi Arabia and Venezuela. They fulfil oil demand locally and amongst the world's top oil-exporting nations. They produce more than they consume so they can afford to sell oil cheaply... Canada is still expensive when you compare their rival Venezuela and Saudi Arabia selling oil many times cheaper than Canada.

But in Pakistan's case we are oil-deprived nation with only 20% local production at peak with fear of soaking up local oil reserves sooner than later and rest of the 80% demand is being fulfilled by importing oil from other nations. The cost of production at local market is obviously way lower than cost of import from oil-rich nations.

You simply cannot compare the two... The closest nation to compare Pakistan's oil demand and supply is the other South Asian countries such as India, Bangladesh and Sri Lanka. Canada should be compared with oil rich countries like Saudi Arabia, Venezuela, Iran and Iraq etc.

Sir, Canada produces oil and thus, we do not have to import from distant countries, which adds transportation cost. Pakistan imports a lot of oil. But is the oil which is brought on the shores in those big ships free of charge? What about all the infrastructure needed etc?

Canada doesn't need all that. We can have railway line to transport oil across. We're even working on pipeline for other energy sources. Despite all this, we pay more than Pakistan.

So I don't know why you say "they can afford to sell oil cheaply." Yes we can, but we still don't pay anywhere close to the cheap price of oil in Pakistan. Also I don't recall saying anywhere that Canada sells oil for cheap compared to Pakistan. We actually pay more than US.

In the case of Venezuela and Saudi Arabia, you can't compare. They sell cheap oil to preserve their "leadership." And oil is certainly cheaper in Venezuela and Saudi compared to Canada, so don't compare that.

The point is, Pakistan imports tons of oil and there is a big cost of transportation. Canada doesn't need to import from far places, yet we still pay more.

I dono Why we Indians and Pakistanis fight every time.... Look at this news..... Indian Govt also did exactly the same few days back...... Smart buggers are playing with taxes at a time people may not take it seriously and may not get the impact..... But once the crude oil prices go back to 100 dollars+, that is the time you will know the implications......

Then they beg the gov't to offer subsidies. Which is what Pakistan has been doing and is in big budget problems. Electricity subsidy, oil subsidy. But hey, when oil price is low and gov't wants to balance budget out, people cry over 5% increase. Cuz hey, they want to screw the gov't one way or the other.