The drop in petrol and HSD prices by Rs. 10 per litre and electricity tariffs by Rs. 5 per unit will cause the Federal Board of Revenue (FBR) to lose around Rs. 70-75 billion per month in 2021-22.
Every month, FBR collects almost Rs. 15 billion in energy sales tax from domestic, commercial, and industrial consumers. The reduction will have a minor impact on energy sales tax collection, which is a major domestic indirect tax spinner.
Starting March 1, 2022, the federal government would reduce the petroleum levy (PL) on petrol and HSD by Rs. 10. It must spend above Rs. 70 billion per month to benefit the public and keep prices low. 70% is sales tax plus gasoline levies.
Fuel is tax-free, according to a top Finance Ministry official. Lower POL prices cost the government Rs. 25 billion each month, and Rs. 200 billion in 2021-22. (March-June).