There were reports that fuel prices in Pakistan were coming down by up to Rs. 8 per liter, but yesterday, very late at night, the Finance Ministry announced that the prices would remain unchanged for the next fortnight. This was a disappointing announcement, indeed. According to media reports, Prime Minister Shehbaz Sharif announced that money saved from maintaining the rates will be used to complete the N-25 highway in Balochistan and enhance the province’s infrastructure. But there is another twist, rather a sneak tax attack by the government in the dark of the night, also known as the petroleum levy (PL).
Petroleum Levy
Before discussing the latest hike, let’s recap. Last month, the government increased the petrol levy on petroleum products to meet its ambitious levy collection target of Rs. 1.281 trillion for the current fiscal year. The government aimed to generate additional revenue to address other pressing economic challenges by retaining fuel prices.
The government also increased the petroleum levy on various fuel products. Effective March 16, the levy on petrol and high-speed diesel (HSD) was raised by 16.67%, from Rs. 60 to Rs. 70 per litre.
Latest ‘Sneaky’ Hike
As the new day dawned upon us, the secrets of last night came into the light as it was revealed that the government had hiked the PL on both petrol and high-speed diesel. As per details, the PL on MS Petrol has been increased by Rs. 8.02 per liter, taking it to Rs. 78.02 from Rs. 70 per liter. Here is the breakdown of the petrol price in Pakistan:
Source: Topline Securities
The same happened with HSD, as its PL was increased by Rs. 7.01 per liter, taking it to Rs. 77.01 from Rs. 70. It is essential to mention that, under IMF demands, the federal government had vowed to raise the PL on petrol and HSD to Rs. 80 per liter in the last fiscal budget.
Source: Topline Securities
The masses will not feel the burn of these high taxes for now, but if international prices jump, the burden will fall on the people. Till then, keep your fingers crossed.
What is your take on this increased Petroleum Levy? Please share your thoughts with us in the comments section.
