Govt likely to impose levy on LPG sector

ISLAMABAD - The government is likely to impose levy on Liquefied Petroleum Gas (LPG) sector which will help to boost the revenue collection by Rs2 billion.

In a meeting with the LPG sector representatives, the official of the Petroleum Division has disclosed that the government is set to regulate the price of LPG within next two weeks. They said the government would collect Rs2 billion by imposing levy on the LPG producers with effect to the expected decision. However, final decision in this regard will be taken very soon. The office bearers of LPG sector including LPG producers, LPG marketing companies, LPG association etc has held a meeting with the Ministry of Energy (Petroleum Division) Additional Secretary (Policy) on Tuesday to discuss the budget estimates in respect of non-tax revenue receipt for fiscal year 2017-18. The meeting was chaired by Jami (acting secretary petroleum) in which Iqbal Z Ahmed (chairman JJVL), Fasi Uddin Ahmed (director JJVL) and Farooq Iftikhar (chairman LPG Association) briefed about local LPG production and problems faced by LPG sector. The officials of LPG and LNG wing of the Petroleum Division also attended the meeting.

While talking to media persons, LPG Distributors Association Pakistan Chairman Irfan Khokar said that he has requested the government to make a formula of LPG price while keeping in view local gas price, imported cost, the previous record of LPG producers cost and international Saudi Aramco Contact Price, to provide a universal base price to all local LPG producers and then introduce 10 percent levy tax on that base price only for local producers.

He further said that he has asked the government that in future, LPG quota should only be allocated to those LPG marketing companies which will mix at least 50 percent imported LPG in their overall sale otherwise local LPG quota should not be allocated, and price of LPG should only be determined after mixing local quota and imported LPG and this price should be same throughout the country.

Khokar asked the government to take action to finish this 5.5 percent advance tax on import or implement this advance tax on local production of LPG as well so that price of LPG could be maintained at lower level. He demanded of the government to reduce $32 terminal charges to $11 according to international rules or terminal should charge $5 as service charges on whole cargo and separately allocate rate on as much storage is provided to LPG importers. The 5.5 percent advance tax on LPG import is a major factor in high price of LPG in the country, he added.

According to data present on the Ogra website, 502232 MT (million tons) of LPG was consumed in 2014 and out of which only 62117 MT was imported which increased to 245578 MT in 2015 when local producers were not able to fulfil the total demand of 875087 MT. In 2016, this demand was higher than before and to fill the demand of 1164706 MT, total 513788 MT of LPG was imported. Even, in 2017’s first five months, 178119 MT have already been imported to fulfil the demand of 461940 MT which will increase with the passage of time as winter is ahead.

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Fuente: THE NATION