LAHORE: The Federal Board of Revenue (FBR) has removed regulatory duty on LPG imports.
Earlier, the government imposed regulatory duty on LPG imports, which was later withdrawn.
The current distortion in liquefied petroleum gas (LPG) prices may continue as the proposed regulatory duty on LPG imports has been withdrawn at the last moment from the new LPG policy draft. At the same time, domestic LPG producers continue to pay the petroleum levy.
A major quantity of LPG is being imported, which is cheaper compared to domestically produced LPG, which becomes uncompetitive in the country’s market. In the initial draft of the new LPG policy, a sub-body of the Cabinet Committee on Energy proposed the imposition of regulatory duty on LPG imports via land route.
However, it recommended that regulatory duty should not be levied on LPG imports through sea. However, in the final policy draft submitted to the cabinet committee, which is meeting on Wednesday, the sub-body withdrew the proposal of imposing regulatory duty on imports via land route.
In the draft, the sub-body suggested that the petroleum levy, currently being applied to keep a balance between prices of domestically produced and imported LPG, should be phased out gradually as the market was moving towards a deregulated and competitive regime. In the meantime, it said, the petroleum levy should continue to be used as a balancing factor to equalise the cost of local and imported LPG.