Govt to remove infrastructure tax on petroleum products soon: Supplies Minister

File- Minister for Industry, Commerce and Supplies, Dilendra Prasad Badu, at his office in Singha Duebar, Kathmandu. Photo: MoICS

KATHMANDU: The government is working to remove the infrastructure tax on petroleum products soon in order to lower the price of petrol which has reached an all-time high in the country.

Minister for Industry, Commerce and Supplies Dilendra Prasad Badu in his address at the Federal Parliament on Friday informed that a meeting of the Council of Ministers has already taken the decision in this regard.

“Due to the rise in the price of petroleum products, keeping in mind the discomfort faced by the general public, taxed levied by the government on the petroleum products will be adjusted which is aimed to give relief to the public,” he said.

“A proposal has already been endorsed by a cabinet meeting held on Tuesday, May 24. Regarding the adjustments to be made on the levied taxes, the Ministry of Finance is working into it,” Minister Badu said.

At present, an infrastructure tax of Rs 10 is being levied on petrol. As per the sources, the Ministry is working on the removal of the tax levied on it and submit the report by next week. With the recommendation to be placed into action, the price of petroleum is expected to reduce by Rs 10 per litre.

Petroleum products are subject to customs and declaration fees, road maintenance charges, pollution charges, infrastructure taxes, and money going to the price stabilisation fund. Adding all these taxes and fees, Rs 180 goes to the government account.

The Nepal Oil Corporation (NOC), a state-owned trading enterprise that imports, stores and distributes petroleum products, on May 22 hiked the price of petroleum products by Rs 10 per litre. The price of liquefied petroleum gas (LPG) per cylinder has been increased by Rs 200 while aviation fuel domestic has been increased by Rs 10.

As per the adjusted price, petrol is sold at Rs 180 per litre and diesel and kerosene at Rs 163 per litre each. Liquefied petroleum gas (LPG) is sold at Rs 1,800 per cylinder and aviation fuel (domestic) at Rs 166.

As claimed by NOC, even with the adjusted price, it would incur a loss of Rs 3 billion in LPG, Rs 3.4 billion in diesel and Rs 1 billion in petrol in one month’s time.

The NOC has said the price of refined petroleum has gone up in the international market due to the impact of Russia-Ukraine war.

The transport and airline industry may increase the ticket rates as per the auto pricing mechanism. Since this month, the government has allowed transport operators to revise fares if the fuel price fluctuates by Rs 5 per litre.

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