Govt projects to mop up Rs1.144tr from oil, gas sector

ISLAMABAD: In a major development, the government has projected to mop up a revenue of Rs1.144 trillion in next budgetary year from oil and gas sector which includes Rs200 billion from gas consumers in the shape of Gas Infrastructure Development Cess (GIDC) against the revised target of Rs25 billion in the outgoing fiscal.

Though the last PTI government had budgeted the revenue of Rs130 billion through GIDC (Gas Infrastructure Development Cess) in 2021-22, which was later revised downward to Rs25 billion.

Moreover, the PMLN-led government has set the target to collect a revenue of Rs750 billion through Petroleum Levy on petroleum products against the budgeted revenue target of Rs610 billion. However, the government is anticipating to earn Rs135 billion by the end of the current fiscal.

In per litre terms, the limit of maximum Petroleum Levy has been increased from Rs30 to Rs50 for the next fiscal year. The Petroleum Levy estimates were increased mainly to revive the suspended IMF (International Monetary Fund) Extended Fund Facility programme.

If the prices of petroleum products in the international market surged higher, it would be quite hard for the government to erase existing subsidies of Rs9/liter on petrol and Rs23/liter on diesel.

Talking to The News, Federal Minister for Finance Miftah Ismail said the government might move ahead with the imposition of Rs5/litre Petroleum Levy initially but if the global prices of oil dropped below $100/barrel then the government would be in position to increase it.

The government has also projected to earn revenue Rs40 billion under the head of NGDS (Natural Gas Development Surcharge) against the revised target of Rs30 billion for the outgoing fiscal ending on June 30, 2022. In the head of royalty on oil, the government aims to collect Rs46 billion in next fiscal against Rs40 billion in the outgoing year.

However, under the head of royalty on gas, the government is estimated to earn a revenue of Rs70 billion against the revised target of Rs60 billion for the ongoing fiscal.

The government has also projected to raise Rs20 billion in the head of discount retained on local crude oil as against the revised target of Rs16 billion in this fiscal year. And it has decided to collect an amount of Rs10 billion in the shape of windfall levy against crude oil and Rs8 billion on account of petroleum levy on LPG (liquefied petroleum gas).