Oil plummeted more than 6 per cent to levels last seen during the financial crisis and a broad index of commodity prices slid to the lowest point of this century as economic doubts gathered over China, the engine room of demand growth over the past decade. China is the world’s largest importer of raw materials and the biggest energy consumer globally. Mounting signs of a sputtering economy, including a plunge in the Shanghai equities market on Monday, have raised the prospect of softer demand for oil and other commodities, removing another support for prices laid low by plentiful supply.In Pakistan A meagre reduction has been made in the prices of petrol, oil and lubricants (POL) instead of eight to 12 percent as proposed by the Oil and Gas Regulatory Authority (OGRA). After the revision in prices, petrol is being sold for Rs 73.76 per litre, diesel Rs 84.04, HBOC Rs 79.79, kerosene oil Rs 57.14 and light speed diesel at Rs 53.56 per litre. After giving this lollypop of slight reduction in oil prices to the masses, the government has jacked up the rates of natural gas from four percent to 67 percent for consumers of different categories. Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi has claimed that the government has been providing a subsidy of Rs 60 billion to the masses. The government should not try to fool the people. The tall claims made by the ministry regarding the subsidy are dissembling with the truth. Unfortunately, the honourable minister has never talked about the unprecedented General Sales Tax (GST) that has been levied on POL products. Second, since the massive reduction in oil prices in the international markets, the government has never passed on the complete benefit to the general public. More importantly, there is no visible change in the prices of daily use items and fares as well as transportation charges. In fact the government continues to treat the sale of POL as a cash cow and does not care for the overall impact of imposing such unjustified levies and taxes on petroleum commodities. Presently, the rate of GST and excise duty in Pakistan is the highest in the region. The government is anxious to meet the ambitious revenue targets, which have been set on the instructions of the International Monetary Fund. The Ministry of Finance takes refuge in increasing the GST rate to meet revenue shortfalls and now it has made an unprecedented increase in gas prices. It is understandable that the government would feel compelled to do this since taxes on oil make up a significant share of the total revenues. The taxes have been hiked at the pump not only to offset price declines, but also to help bridge revenue shortfalls, as happened in May when a regulatory duty and a hike in GST were passed just to help meet the revenue target.
pk.shafaqna.com
