Govt shifts Rs15 per litre levy to refineries for a month to prevent increase in petrol prices
Minister for Petroleum and Natural Resources Ali Pervaiz Malik. Photo: Reuters/ File
ISLAMABAD:
Petroleum Minister Ali Pervaiz Malik said on Monday that a Pakistan-bound LNG cargo ship was attacked before it entered the Strait of Hormuz but did not name the culprits, as he formally announced to pass on the impact of Rs15 per liter petroleum levy to oil refineries to keep petrol prices relatively lower.
“The LNG-ship was hit before it entered the Strait of Harmuz,” said Ali, while addressing a press conference along with Information Minister Attaullah Tarar. The information minister urged the media to avoid any speculation about the perpetrators and said that the government would share only the verified information.
“Rest assured there are no shortages of the supplies. It is a sensitive time and one should avoid speculation,” he said, while responding to a question how the ship was attacked when Pakistan had gotten clearance from Iran.
Qatar and Saudi Arabia have condemned the attack on the LNG tanker, calling it a “dangerous act” that threatened the security of global energy supplies.
Pakistan had negotiated with Iran to secure safe passage for LNG carrier Al Mayeda. The Qatari foreign ministry said it had initiated the necessary investigations to determine the circumstances of the incident and identify those responsible for the attack on the vessel.
The information minister did not respond to questions about the opening or closing of Pakistan-Iran border for trade but said that in this case also the speculations should be avoided.
Ali Pervaiz Malik announced that oil refineries would bear a burden of approximately Rs15 per litre or Rs15 billion for one month, which would allow petrol to be sold Rs15 cheaper than what it was in the global market amid the US-Israeli war on Iran.
The impact of the Rs15 per litre burden shifting from consumer to oil refineries has already been passed in Friday’s price determination.
He said that the arrangement had been implemented from Friday after Prime Minister Shehbaz Sharif decided to pass on the partial impact of the levy to oil refineries. “The oil refineries’ three-month profits are even more than their annual profits of the last year,” said Malik.
Till now the government was reluctant to admit that the oil refineries were earning exorbitant profits and there was a need to change the pricing formula. “I am grateful to all the refineries that saw the public is in difficulty and with the government’s help increased their throughput,” the minister said.
“They were requested to take a step to support the public during this difficult time, and I am glad that they listened to us the Rs15 increase that was coming in the petrol prices on Friday, they helped the government with that and because of that we were able to maintain the price.
The government is still charging Rs80 per liter levy out of the Rs378 petrol price but now the Rs14.71 per liter levy will be paid by these refineries.
The federal cabinet on Friday approved that the import price of petrol may be determined on the basis of the actual import cost of the relevant PSO cargo. Where the actual import cost is unavailable for the relevant daily pricing, the premium, incidentals and customs duty of the last available cargo may be used to determine the import price.
The refineries will be entitled to ex-refinery price of petrol calculated by fixing premium, incidentals and customs duty at level of price effective for 7 March 2026 (pre-war) for next 30 days. The difference between the import price determined and the ex-refinery price shall be surrendered by the refineries under Petroleum Levy head of account.
The resulting benefit from the adjustment in petroleum levy will be passed on to petrol consumers only through a corresponding reduction in the price of petrol.
Malik said that more improvement would be seen by the public, expressing his gratitude to the refineries for standing with the government to provide assistance to the public during a time that had caused everyone difficulties – even the government as it struggled to procure oil at increasing prices.
He added that before the crisis, the premium of the refineries was $5 per barrel, and even today a $20 limit had been established. He further said that the government would have to step in and protect the public in case of further difficulties.
To a question regarding a delay in finalising 16 to 22 LNG cargoes to meet winter needs, the petroleum minister said that the prime minister and a few friends had a view that the difference between the Qatar LNG and the one bought from the open market was high.
Based on the three-time meal supply of gas to residential consumers, the government has made arrangements to meet the requirements of November, said Malik. He said that the decisions were being made to meet the requirements for the months of December and January.
The information minister said that the fuel subsidy scheme for the motorcyclists and car owners would continue. So far Rs27 billion have been disbursed under the scheme and 15 million beneficiaries have registered for it.
Tarar also defended the ad-hoc appointment of Establishment Secretary Nabeel Awan as acting Chairman Oil and Gas Regulatory Authority (Ogra). It does not matter whether the OGRA chairman is acting or permanent but he was doing a great job and would continue serving as the OGRA chairman, said Tarar.
