| 25 Jan 2012 |
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Gasoil, diesel prices to drop once Parliament approves VAT cut
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25 January 2012
BEIRUT: The prices of gasoil and diesel are expected to fall as much as 10 percent once the Parliament convenes and approves a recommendation by the parliamentary Budget and Finance Committee to remove the VAT from this commodity.
“The measure will help alleviate social conditions and lessen the energy bill on households. It should also contribute to lowering production costs on agricultural products and bread,” Maroun Chammas head of the Association of Oil Importers said.
The parliamentary Finance and Budget Committee endorsed Tuesday a draft law to permanently eliminate VAT on the two vital commodities.
Sources told The Daily Star that parliamentarians will pass the draft law once Speaker Nabih Berri calls for a session. According to media reports, the committee combined suggestions made by MP Neamatallah Abi Nasr and the Cabinet.
Abi Nasr, who submitted the proposal, said the step would alleviate negative consequences of international price hikes of petroleum on vital economic sectors.
He stressed the step would significantly lower production costs for the industrial and agricultural sectors.
However, leading industrialist Jacques Sarraf says consumers rather than companies would benefit the most from the measure. “Industrial institutions are already refunded the [VAT] paid to the treasury. It is the consumer who ends up paying the VAT and not us. But this measure will spare the companies and industrialists from filling forms to refund the VAT.”
Gradual hikes on the price of the commodity, usually attributed to increasing prices of petroleum internationally, pushed the current price of gasoil to around LL29,300 per 20 liters as per last week’s prices issued by the Energy Ministry.
Chammas said some distributers sold subsidized red gasoil claiming it was the cleaner non-subsidized green diesel.
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