Petroleum Levy Bill proposes stiff penalties

Islamabad: The amendment bill was presented by Federal Minister for Parliamentary Affairs Tariq Fazal Chaudhry. The proposed law aims to make the collection mechanism of levies imposed on petroleum products more effective and provide legal authority to take action against the relevant companies in case of non-payment.

According to the bill, it is proposed to make oil marketing companies, refineries and other licensees liable to pay petroleum levy and climate support levy. It is also proposed to make the payment of these dues part of the license conditions.

Under the proposed amendment, companies will have to pay the levy from the date of issue of the license, while refineries will be obliged to deposit the due levy on their products in advance. For this purpose, it is proposed to make payment mandatory before sending the products out of the refinery gate.

Surcharge on delay and suspension of license

The bill proposes to impose an additional surcharge for non-payment of levy on time. Its rate is proposed to be fixed at one and a half times the six-month KIBOR or 12 percent per annum.

If the company concerned does not pay the due levy or surcharge, the proposal to empower the Oil and Gas Regulatory Authority (OGRA) to suspend its license is also part of the bill.

Proposed three-year imprisonment and fine

Under the proposed law, non-payment of levy or fine will be punishable with imprisonment for up to three years, fine or both. Moreover, action has also been taken against the directors of the company concerned.

The bill also includes a proposal to make it mandatory for companies and refineries to submit monthly statements regarding levy payment, so that payment of dues and related records can be monitored.

The legal status of the proposed amendments will be clear only after their approval and implementation. Therefore, for now, these conditions and penalties should be seen as proposals under consideration rather than as enacted law.