The National Petroleum Authority (NPA) has announced the reinstatement of the Price Stabilization and Recovery Levy on petroleum products, effective April 4, 2024.
The decision, outlined in a letter dated April 3, 2024, comes just days after the suspension of the levy, which was set to be in effect from April 1 to June 30, 2024, following a directive from the Finance Ministry in collaboration with the Energy Ministry.
The new levy rates will be 16 pesewas per litre on petrol, 14 pesewas per litre on diesel, and 14 pesewas per kilogram on Liquefied Petroleum Gas (LPG).
The reasons behind this sudden reversal have not been explicitly stated.
However, the move could potentially lead to an immediate increase in the prices of petroleum products, as the adjustments made by Oil Marketing Companies on April 1 did not include the Price Stabilization and Recovery Levy in their price build-up calculations.
The government’s decision to reinstate the levy highlights its utilization of the Energy Sector Levies Act 2015 (Act 899) as a tool to stabilize petroleum product prices for consumers over specific periods, reflecting a strategy to manage the impact of fluctuating international market prices on local consumers.
