Government reduces sales tax on POL products

A notification implying sales tax reduction on petroleum products has been issued by the Federal Board of Revenue (FBR).

According to the notification by FBR, the new sales tax on kerosene oil is reduced to 15.44 per cent from 17 per cent.

The sales tax on light diesel has been brought down to 7.56 per cent which was 17 per cent previously. The FBR added in the notification that the 17 per cent sales tax on petrol and high-octane petrol is retained.


The implementation of the new sales tax prices will be applicable from May 1.

According to government officials, the reduction in the sales tax is made to maintain the current prices of petroleum.

Earlier on April 30, the government rejected Ogra’s recommendation of increasing POL product prices and decided to retain rates of fuel products.

Dr Shahbaz Gill Special Assistant to Prime Minister said on Twitter that Prime Minister Imran Khan had decided that the price of petroleum products would not be increased however Ogra summary recommended an increase of Rs 5 to 10. The Prime Minister rejected it and decided to maintain the April 16 prices.

Earlier, Oil & Gas Regulatory Authority (OGRA) has issued a notification to reduce the LPG price by Rs12.39 per kg.

According to the notification, the new price of LPG is fixed at Rs133.25 per kg while in April, the price of LPG was Rs145.64 per kg. After the decrease, the 11.8 kg LPG domestic cylinder became cheaper by Rs146.19.

The new prices will apply to May 2021.

The notification further stated that the new price of a domestic LPG cylinder is fixed at Rs1,572.40, while in April, the price of a domestic LPG cylinder was Rs1,718.59.

It may be recalled that a month ago, the LPG price was reduced by Rs14.9 per kg.

In the other move, OGRA had also sent a summary to increase petroleum products prices to the Petroleum Division, according to which it has been proposed to increase the price of petrol by Rs5.75 per litre and diesel by Rs 6per litre.

Sources claimed that the proposed prices of petrol and diesel have been fixed at the rate of the current petroleum levy, the current levy on petrol is Rs11.23 per litre and on diesel Rs15.29 per litre while the final decision on prices is final.

However, the final decision on prices was taken by the Finance Ministry in consultation with the Prime Minister.

On March 31, Finance Minister Hammad Azhar announced Rs. 1.50 per litre cut in the price of petrol while Rs. 3 per litre decrease in that of diesel.

The current levy on petrol is Rs 17.97 per litre while the current levy on diesel is Rs 18.36 per litre.

Earlier on April 1, the government also reduced the price of diesel and petrol by Rs3 and Rs1.5 respectively.

On January 15, OGRA had proposed to increase petroleum rates by Rs13 per litre but PM had approved a Rs3.20 increase in prices.

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