Govt to keep POL prices unchanged in March

ISLAMABAD: Finance Minister Ishaq Dar on Friday said that the government had decided to keep the petroleum prices unchanged for the next month with effect from March 1, 2015, against the proposed increase in the prices by the Oil and Gas Regulatory Authority (Ogra).
The minister also disclosed that the Financial Action Task Force (FATF) had removed Pakistan from grey or risky countries category on suspicion of money laundering and terrorist financing, and put Islamabad on the white list.
“We have decided to decrease the GST rate from 27 percent to 18 percent for four products of petroleum while the GST rate for High Speed Diesel will be enhanced from 27 percent to 37 percent. The government will also take hit on the front of Petroleum Development Levy (PDL) to keep the prices unchanged for the next month with effect from March 1, 2015,” Federal Minister for Finance Ishaq Dar said, while addressing a news conference here on Friday night.
Flanked by the whole economic team, the minister said that with the decision to keep the prices unchanged, now the price of motor spirit would stand at Rs70.29 per litre, High Octane Rs80.31 per litre, kerosene Rs61.44, High Speed Diesel Rs80.61 and Light Diesel Rs97.94 per litre from March 1, 2015.
The government, he said, would take hit on account of the PDL to keep the prices unchanged for the second month. According to him, the government would take hit of Rs5.11 per litre on High Octane, Kerscene Rs2.07 per litre, Light Diesel 85 paisas, HSD 31 paisa and petrol 18 paisas per litre. He said that Ogra had proposed an increase in the prices of High Octane by Rs12.62 per litre that could go up to Rs92.93, kerosene by Rs7.32 per litre that could be increased to Rs67.76 and Light Diesel by Rs5.50 that could go up to Rs63.44 per litre.
But Prime Minister Nawaz Sharif decided that the government would decrease the GST rate from 27 percent to 18 percent for four petroleum products where Ogra had proposed an increase in prices. The government also decided to increase the GST rate from 27 to 37 percent for the High Speed Diesel to keep its price unchanged for March 2015.
“We have stabilised the POL prices for consecutive two months, but I want to make it clear that this situation cannot persist for a longer period if the prices in the international market go up,” said the minister.
The minister said that FATF had put Pakistan into the category of grey or risky countries three years back and further deterioration could put the country into the blacklisted category that could result into reconfirmation of opening up of letters of credit (L/Cs) and increased cost by four percent. He said that the PML-N government had fought to reverse this status in the last 21 months and a FATF review team had also visited Pakistan to review the actions taken by Islamabad in this regard.
“Finally, I wrote a letter to FATF on February 21, 2015 to apprise them of the actions taken by Islamabad to curb money laundering and terrorist financing, especially in the context of the National Action Plan (NAP),” he said and added that the FATF had now removed Pakistan from the grey list and put the country on the white list, which indicated that the country was taking satisfactory actions to curb money laundering and terrorist financing.
“Pakistan appreciates this decision of FATF,” he said, adding that it was an evolving subject for all the countries, and Islamabad would continue to move ahead in accordance with its home-grown agenda to implement the NAP effectively.
The minister said that the World Bank also restored the IBRD funding for Pakistan that would increase the resource envelop by an additional $2 billion for the country. He said that the WB had committed around $11 billion for Pakistan for the period of 2015-19 mainly for four sectors of the economy i.e. including economy, energy, extremism and education/health sectors. He said that the government had not yet decided the plan to invest this additional amount of $2 billion, but this additional money would be utilised in high priority projects of the country.