Consumers bear heavy tax burden on petroleum products

ISLAMABAD: Consumers are paying a significant amount in taxes, duties, and margins on petroleum products, according to official documents obtained by Geo News.

As per the documents, Rs107.12 per litre is collected in taxes, duties, and margins on petrol, while Rs104.59 per litre is levied on high-speed diesel (HSD). Before taxes and duties, the ex-refinery price of petrol stands at Rs148.51 per litre, while HSD costs Rs154.06 per litre. A petroleum levy of Rs70 per litre is imposed on both petrol and HSD. Additionally, petrol includes Rs15.28 per litre in customs duty, while HSD has Rs15.78 per litre in customs duty. Dealers earn Rs8.64 per litre as commission on petrol and HSD, while oil marketing companies (OMCs) take Rs7.87 per litre as a margin. The inland freight equalisation margin (IFEM) for petrol is Rs5.33 per litre, while for HSD, it is Rs2.30 per litre. The documents further reveal that no sales tax is currently being charged on petrol or diesel. Meanwhile, the retail price for petrol stands at Rs255.63 per litre, while HSD is priced at Rs258.64 per litre. Prime Minister Shehbaz Sharif on March 15 decided to keep petroleum product prices unchanged for the next fortnight and divert the relief from a decrease in petrol prices in the international market towards a notable downward revision in the power tariff for the masses.

The Finance Division has also issued a notification, stating that the government has decided to maintain the prices of all petroleum products at the current levels.