Wapda urges government to reduce tax on furnace oil

ISLAMABAD Pakistan's government has been asked by the Water and Power Development Authority (Wapda) - the country's one of the major state sector organisations - to reduce the size of tax on furnace oil and electricity to mitigate additional burden on consumers arising out of abnormal increase in international oil prices.

By From A Correspondent

Published: Fri 7 Mar 2003, 1:24 PM

Last updated: Tue 28 Nov 2023, 11:09 AM

This is part of a multi-pronged strategy the Wapda has taken up with the government to avoid an expected increase in electricity prices later this month.

Talking to reporters here yesterday, the Wapda chief said Wapda has informed the National Electric Power Regulatory Authority (Nepra) that increase in furnace oil by 50 per cent during the last three months had an additional impact of Rs17.5 billion on its revenue.

He said furnace oil prices had increased to Rs16,000 per tonne and it was now the job of the Nepra to see how this could be mitigated. One way, he said, was to reduce taxes and duties which at the rate of 5 per cent had increased from Rs250 to Rs800.

"The Central Board of Revenue (CBR) and finance ministry were getting rich out of this additional income and we have asked them to share the burden," said the Wapda chief.

He also demanded to restore the powers of the Oil and Gas Regulatory Authority's (Ogra) to regulate the furnace oil prices he said had been held in abeyance so that the OGRA could be in position to regulate oil prices.

"It is strange that oil prices are being fixed by the Oil Marketing Companies (OMC) like Shell, PSO and Caltex which is the primary responsibility of Ogra," he said.

To a question he said that furnace oil prices have increased tremendously and it would be available to Wapda at Rs16,000 per tonne in Muzzafar Garh, adding that fuel oil prices increased by 50 per cent during the last three months and its financial impact on utility has been calculated at Rs17.5 billion on the power utility. Now it was the duty of the regulator to mitigate this hike in furnace oil prices, he said.