CCoE shoots down new LPG Policy draft
Aftab Ahmed
Islamabad: The Cabinet Committee on Energy (CCoE) on Thursday questioned and rejected a new LPG Policy 2021 that favoured powerful LPG importers.
According to Newztodays.com, the Petroleum Division has tabled a report before the cabinet panel on energy, asking approval of the new proposed LPG Policy 2021.
However, the cabinet body rejected a policy and urged the Petroleum Division to answer questions raised at a meeting.
According to sources, the cabinet committee on energy met on Thursday to discuss the draft of a new LPG policy, as well as various other concerns.
Following the sugar, wheat, and oil scams, the Petroleum Division has modified LPG Policy 2021, which appears to favour an influential LPG importer and terminal operators by eliminating regulatory duty and advance tax only on LPG imports by sea.
The Petroleum Division has implemented measures to reinforce the monopoly of important LPG importers at the expense of domestic production and land-based imports.
LPG importers are alleged to have pocketed more than Rs 20 billion in the last couple of years as a result of a preferential tax regime at the expense of the national exchequer.
Local LPG producers pay 17% GST. Previously, the government levied a regulatory duty equal to the petroleum levy on imported LPG.
Read More: LPG price has been increased by Rs 5 per kg
Importers, on the other hand, had avoided regulatory duty. Furthermore, because LPG importers pay 10% GST and sell at market price to consumers, they pocket the remaining 7%.
The Petroleum Division has devised a new technique to favour one significant LPG importer in the revised draft.
The petroleum division has recommended a ten per cent GST on domestic LPG producers and importers. It had, however, recommended eliminating the 5.5 per cent advance income tax and the regulatory duty on LPG imports by sea. As a result, it will reward one significant influential LPG importer who will benefit from the waiver of advance tax, federal excise duty, and regulatory duty.
However, the petroleum division has proposed imposing a regulatory duty on LPG imports via land route. A regulatory tariff on LPG imports via land route would be applicable.
This demonstrates how the petroleum division wishes to tighten the noose around small LPG importers who import LPG from Iran via land route and locally manufactured LPG.
The state-owned LPG businesses OGDCL, Parco, and PPL had significant stakes in locally produced LPG. They had petitioned the government about imposing a regulatory tariff on LPG imports and removing the petroleum fee on domestically produced LPG.
All summaries are slanted toward imports and how to boost importers’ margins while discouraging local producers.
According to the local industry, importers should be required to declare the prices of the previous six months’ imported consignments, which should be verified by FBR, customs, and port and terminal authorities, in order to determine the actual cost of imported LPG, which is currently being traded at heavy discounts minus from CP up to $250.
If the government is serious about providing relief to end consumers, the Rs 200 per cylinder can be reduced by waiving PDL and GST from local LPG production, as only the waiver of RD and GST on imports is pocketed by importers, as consumers buy at the same price regardless of whether it is local or imported.
Read More: How LPG Pundits work out plan to trap country
The current PM and all CCOE members have been misled by incorrect and dubious information provided by some government officials, and as the current PM and all CCOE members are deadly honest, intelligent, and vigilant, they have requested a thorough investigation and evaluation to ensure that any policy document presented to this august forum has been thoroughly reviewed, shared by all stakeholders, and documentation elicited.
Surprisingly, despite representation from all major government producers such as OGDCL, PARCO, PPL, and PAPCA forum, as well as solid evidence and proof of over Rs 20 billion loss to the government exchequer, the Mafia has been able to maintain rather more incentives for imports at the expense of local and government exchequer.
Read More: LPG market is non-competitive, dysfunctional
Several summaries have been slanted toward importers, despite a special study and recommendations carried out by the Planning Commission on the advice of the Prime Minister, whose recommendations have been set aside solely to provide undue favour and incentives to importers. Local industry urges that law enforcement agencies like NAB and FIA should conduct their investigations.
