Karachi: The National Assembly’s Standing Committee on Finance has approved two money bills in the current fiscal year by imposing the Gas Infrastructure Development Cess and Petroleum Levy on Liquefied Petroleum Gas (LPG) aimed at raising additional revenue of worth PKR 38 bn, which would be utilized for reducing LPG prices and for the development of gas infrastructure in the country.
According to Alfalah Securities, the government is likely to generate PKR 34.390 bn and PKR 4 bn from the imposition of development cess and petroleum levy respectively, out of which a major chunk would be collected from the fertilizer sector (PKR 11.10bn), CNG stations (PKR 11.87bn), Independent Power Plants (PKR 5.88bn) and the industrial sector (PKR 4.62bn). The bills also stated that a 4% penalty in addition to the average KIBOR would be charged on companies failing to deposit the cess amount to the government.
The petroleum levy imposed on LPG would reduce the gap between local and imported LPG prices as the overall sector is generating huge profits and the levy collected from these LPG companies would help in reducing the cartel between them. The government also required a hefty investment of PKR 100 bn in order to develop infrastructure for the Iran Pakistan Gas Pipeline and LNG pipelines from Karachi to Lahore however, no parties were present to grant loans of such a huge amount and the ultimate option was to impose tax while assuring that it would have no impact on the consumers.