Petrol Tax Will Increase by Rs. 20/Liter Soon on IMF Demand

Consumers may not see any reductions in MS petrol and High-Speed Diesel (HSD) prices from the next fiscal year (2024-25) as the federal government is considering a proposal to impose sales tax on petroleum products (POL) and hike the petroleum levy by up to Rs. 20 per liter, high-level sources told ProPakistani. The International Monetary Fund (IMF) wants Pakistan to impose an additional financial burden on the common man to increase its tax revenue and unlock a new bailout program. A proposal to charge a 5 percent sales tax on POL products is also on the table, sources added. Currently, the sales tax rate on petroleum products stands at zero, while the petroleum levy is Rs. 60 per liter on both MS and HSD. Sources warned that the petroleum levy could spike to at least Rs. 80 per liter in FY25 if the government succumbs to IMF pressure. They added that if both the sales tax and increased levy are implemented, the expected relief from reduced petroleum prices will not be passed on to the public next fiscal year.