Pakistan's oil import bill down

Despite an increase in consumption of petroleum products, the government spent Rs 105 bn less on oil imports in the first half of the current fiscal year compared to last year, because of decline in international crude prices.
The oil import bill declined by about $ 1.24 bn to $ 4.64 bn in the first six months (July-December) of the current year compared with $ 5.88 bn in the same period last year, a reduction of more than 21 %, according to figures released by the Federal Bureau of Statistics.

Of the total bill, import of petroleum products declined by a paltry 3.4 % to $ 2.9 bn from with $ 3.3 bn in the first six months of the last fiscal year. Moreover, the import of crude oil during the first six months of the current year amounted to $ 1.7 bn against $ 2.6 bn, a reduction of more than 33 %.
The import bill would have been even much lower had the government imported more crude than petroleum products.

The figures suggest that quantity wise import of petroleum products surged by 32% to 5.9 mm tons during the period from 4.5 mm tons last year. The crude import increased nominally by 1.8 % to 3.57 mm tons from 3.5 mm tons last year.
Separately, the government has collected more than Rs 120 bn from sales tax and petroleum levy on oil products in six months. Besides, a 16 % variable general sales tax on all petroleum products being charged to consumers, the government also collects a fixed petroleum levy at the rate of Rs 10 per litre on petrol, Rs 14 on high octane blending component, Rs 6 on kerosene, Rs 3 on LDO and Rs 8 on high-speed diesel.

Informed sources told that the government revenue on account of petroleum levy alone stood at about Rs 58 bn during the first six months of the current year. The government earns on an average Rs 10 bn per month as petroleum levy on five petroleum products, namely high-speed diesel, light diesel oil, kerosene, HOBC and petrol.
The GST collection on petroleum products during the six-month period (July-December 2009) was estimated to be more than Rs 62 bn, the sources said.

The government has set a budgetary target to collect about Rs 122 bn during the current fiscal year on account of petroleum levy that was originally introduced as carbon tax, but later renamed as petroleum levy, when the Supreme Court raised questions about the utilisation of carbon tax.
The import of machinery and related items also dropped by about 24 % to $ 2.65 bn from $ 3.46 bn last year, showing contraction in industrial activities in the country.