Petroleum production is heavily dependant on refining capacity, efficiency, and a stable crude oil supply. Over the years Pakistan has increased its refining capacity, with newer and more efficient refineries set up, but is largely dependant on imports for its crude oil supplies. Imported crude oil would lead to higher prices for petroleum and related products, but the addition of value added taxes, like GST and the petroleum development levy, push prices even higher. Petroleum products provide highest indirect source of revenue for the governmen. The collection on petroleum products in 2010-11 was Rs153.3 billion or 47.2 per cent of the total collection. Unless the government shifts its revenue dependence away from taxing petroleum products, it is highly unlikely that fuel prices will be brought down, pushing us further into the energy crisis.
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