Mohsin Siddiqui (Chief Reporter)
The proposed hike in the petroleum levy will affect several petroleum products Petrol and Diesel (HSD): Increased to Rs 80 per litre from Rs 60 per litre. High Octane Blending Component (HOBC), Light Diesel Oil (LDO), and E-10 Gasoline: Levy increased from Rs 50 to Rs 75 per litre. Superior Kerosene Oil (SKO): The levy remains unchanged at Rs 50 per litre.
The originally budgeted petroleum levy for the outgoing year was Rs 869 billion. The proposed amount for the next year marks a 47.4% increase. The revenue from the petroleum levy has always been prioritized by successive federal governments because it is not part of the Federal Divisible Pool (FDP) that must be shared with the provinces under the National Finance Commission (NFC) formula. This makes it a crucial independent revenue stream for the federal government.
The government plans to maintain the Gas Infrastructure Development Cess (GIDC) collection at Rs 2.5 billion for the fiscal year 2024-25, which is the same as the revised target for the current fiscal year. Initially, the GIDC was budgeted at Rs 40 billion for the current year, but actual collections fell short due to legal challenges and stay orders obtained by various companies.
The Natural Gas Development Surcharge (GDS), which is the difference between the prescribed and sale price of gas and goes to the provinces, is projected to generate Rs 25.618 billion next year, down from the budgeted Rs 40 billion and revised Rs 27.169 billion for the current year. The Auditor General of Pakistan (AGP) is currently auditing GDS claims from both Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company (SSGC) to determine the actual collections.
Petroleum Levy on Liquefied Petroleum Gas (LPG): The government aims to collect Rs 3.537 billion, slightly higher than the revised target of Rs 3.516 billion for the current fiscal year. The original budget for the current year was significantly higher at Rs 12 billion. Discount on Local Crude Oil Prices: The budget retains Rs 25 billion as a discount, unchanged from the revised estimate for the current fiscal year, though initially budgeted at Rs 20 billion.
Royalty on Crude Oil and Natural Gas: The budget proposes a decrease in royalty on crude oil to Rs 58.654 billion from Rs 57.017 billion. Conversely, the royalty on natural gas for provinces is set at Rs 103.751 billion, up from a revised Rs 93.567 billion and initially budgeted Rs 75 billion for the current year.
Windfall Levies: Rs 28 billion is projected from the windfall levy on crude oil, up from Rs 20 billion in the current year. The windfall levy on gas is budgeted at Rs 400 million, compared to Rs 220 million this year.
Miscellaneous receipts from oil and gas companies are expected to generate Rs 1,528.46 billion in the next financial year, compared to a revised target of Rs 1,197.8 billion and budgeted estimates of Rs 1,141 billion for the outgoing fiscal year.
