It has been announced that Pakistan will once again experience a significant increase in petrol prices during the upcoming price revision, causing distress among the citizens. Reports suggest that the price of petrol is expected to rise by Rs. 9.50, reaching a new rate of Rs. 289.25 compared to the previous rate of Rs. 279.75.
Furthermore, it is predicted that the diesel price will see a hike of Rs. 0.86, reaching Rs. 285.56 from the previous rate of Rs. 287.33 in the next fortnight.
The Cause
The main reason behind this increase in petrol prices, and the government’s decision to announce such a significant rise, is primarily linked to the recommendation from the International Monetary Fund (IMF) to reintroduce an 18% general sales tax (GST) on petrol in order to receive the final tranche of its bailout package.
There are also reports suggesting that the government plans to raise the petroleum levy from Rs. 60 to Rs. 100. The Petroleum Development Levy has undergone several adjustments in recent years, with a notable increase during the fiscal year 2023.
Initially set at Rs. 20 per liter in July 2022, the petroleum levy on petrol was later raised to Rs. 50 per liter in November 2022, and further increased to Rs. 60 per liter until September 2023.
Currently, the government imposes a development levy of Rs. 60 per liter on both petrol and diesel, which is the maximum limit allowed by the law. Factors such as Pakistan State Oil requirements, taxes, and global oil prices are taken into consideration when determining these prices.
At present, the government imposes an approximate tax of Rs. 82 per liter on both petrol and diesel. While there is no General Sales Tax (GST) applied to all petroleum products, the government collects a petroleum levy of Rs. 60 per liter on both products.
What are your thoughts on the upcoming increase in petrol prices? Share your opinions in the comments section.
