Low consumption of MS, HSD: Jul-Aug PDL collection shortfall stands at Rs93bn


The shortfall in collection of petroleum levy against the budgeted target was Rs93 billion in July and August 2022 – with actual collection in July amounting to Rs 15 billion and in August Rs 17 billion against the target of Rs 62.5 billion every month.

The federal government has been unable to achieve Rs 125 billion projected target of petroleum levy (PL) for July-August 2021-22 due to low consumption of two major petroleum products – Motor Spirit and High Speed Diesel.

Sources in the Petroleum Division told Business Recorder that the sale of these two petroleum products was less in the first two months of the ongoing fiscal year because of steep increase in their prices. Sale of petrol for the first two months of the current fiscal year declined by 20 percent and HSD by 47 percent.

According to Oil Companies Advisory Council (OCAC) data, sale of petrol was 818,000 MT in July 2021 which declined to 580,000 MT in July 2022, or approximately 30 per cent lower; whereas sale of HSD was slashed by 45-50 per cent from 730,000 MT in July 2021 to about 400,000 MT in July.

Govt aims to collect Rs91bn thru GST, PL on POL products

Sale of petrol dropped by 13 percent in August 2022 to 637,000 MT against 736,000 MT in the same month of last fiscal. The sale of HSD also declined by 26 percent to 496,000 MT compared to 670,000 MT in the month of August 2021.

According to monthly Economic Update and Outlook for September 2022 released by Finance Division, there was a decline in non-tax revenue by 13 percent – from Rs 47 billion in July 2021-22 to Rs 41 billion in 2022-23.

The PL share in non-tax revenue in fiscal year 2021-2022 was Rs 127.5 billion which was 11 percent of total non-tax revenue collected. This year PL is budgeted at Rs 750 billion which is 38 percent of total non-tax revenue budgeted for the year.

The rate of PL on petroleum products was zero in July 2021 and Rs 10 per litre on Petrol and Rs 5 per litre on HSD in July 2022.

The PL on petrol was raised from Rs 10 to Rs 20 per litre in second half of August 2022 and on HSD to Rs 10 per litre. Federal government has targeted to increase PL to its maximum limit of Rs 50 per litre till January 2023 and to achieve the maximum limit on HSD by April 2023 to meet the budgeted target of Rs 750 billion.

In 2021-22, the government collected only Rs 127.5 billion under PL which is 20 percent of budgeted estimates of Rs 610 billion.

Related posts