Government Imposes Tax of Rs11, 486 per ton on LPG

Government Imposes Tax of Rs11, 486 per ton on LPG

Tuesday, January 17, 2012: Liquefied Petroleum Gas (LPG) prices prevailing in Pakistan are supposed to take a hike once again after the federal government, Islamabad, has levied a new kind of tax names, the petroleum levy, on the
production of the commodity.

According to commendable sources, the federal government has increased the LPG prices by Rs11, 486 per ton. This will ultimately increase the prevailing market prices of Liquefied Petroleum Gas by 10 %.

Currently, LPG is being sold for somewhere around Rs140 per kg and after the tax is implemented the consumable prices for the product will reach about Rs155 per kg, which is the highest price LPG has ever reached.

The imposition of new Tax didn’t sit well with Liquefied Petroleum Gas Association of Pakistan (LPGAP). The group is planning to challenge the increase in countries Supreme Court.

Belal Jabbar, a representative of the association, said “We intend to bring this regrettable development to the attention of the court.”

Jabbar further said, “The government’s decision to deliberately raise prices, which are already equated with Saudi Arabian export prices, is flawed.”

LPGAP also held that Ministry of Petroleum and Natural Resources has circumvented the court’s orders and the suspension of the LPG Policy 2011 through an alteration to the Petroleum Products (Petroleum Levy) Ordinance, 1961.

The LPG industry maintains that the policy was crafted to secure the financial feasibility of Progas LPG import facility, which was controversially purchased last year by Sui Southern Gas Company Limited.

The country’s eleven LPG producers are expected to pass the additional cost to end-consumers. The government is the largest producer of LPG in the country by virtue of its shareholdings in Pak-Arab Refinery Company, Oil & Gas Development
Company and Pakistan Petroleum Limited among others.

In response to LPGAP, Ijaz Chaudhry, Petroleum Secretary, said that “The imposition of the levy was suspended earlier on the alleged reason that it was not imposed by an Act of Parliament. Now that it is through an Act, it can
be imposed.”

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Posted by Wajahat Javed on Jan 18 2012. Filed under Business, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry