The Supreme Court on Wednesday issued notices to the federal government, Oil and Gas Regulatory Authority (OGRA) and other stakeholders to file within one week statements containing data showing the mechanism and justification of fixation of petrol and gas prices.
The court also directed the ministries concerned to file written replies explaining the imposition of various taxes on petroleum products. A three-member Supreme Court bench headed by Chief Justice Mian Saqib Nisar, was hearing a suo motu case pertaining to high prices of gas, oil and petroleum products.
In his arguments, Khawaja Azhar Rasheed, counsel for OGRA, stated that fixing of oil and gas prices was determined by the government, while OGRA, being a regulatory authority, just notify these prices.
Justice Ijazul Ahsan noted that when the price of oil fluctuates in the international market, its benefit does not pass on to the consumers. When price goes down from $100 per barrel to $50 per barrel then its benefit is not transferred to the consumers, he said, and sought justification behind imposition of 25 per cent sales tax.
“We want to see a complete chart showing each component of the duty such as cost, international market price, refinery price and sales price etc”, the chief justice said.
Representing the federal government, the additional attorney general (AAG) explained that the apex court in Zafar Iqbal Jhagra’s case had decided a mechanism/system of oil pricing and the same mechanism was being followed. “We have lowest petrol price in the region despite taxation.” He said that taxes on petrol were very high in India.
The chief justice asked him to tell in how many issues Pakistan was better than India. “What is the Pakistan’s growth in the information and other sectors of technology?” the chief justice asked, adding: “We should not compare everything with India.
The AAG explained that refinery price was Rs 54.5, whereas the Custom duty was Rs 6.21. “Besides, there are inland freight, petroleum levy, market dealers and the dealers at fuel filling stations.” To a court query, he said Customs duty was charged under Petroleum Levy Ordinance 1961.
“We too have indigenous production of petroleum,” the chief justice noted. The AAG, however, stated that the government did not rely on the price of crude oil, but import.
“It has come to our knowledge that Dhaka Fund is also levied on petrol,” the chief justice noted. The AAG, however, contended that it was not true. The chief justice noted that the government was receiving 25 percent general sales tax on petroleum products, despite the slump in the prices of crude oil in the international market.
Published in Daily Times, May 10th 2018.
