Petrol prices likely to increase in Pakistan

Islamabad: According to sources, there is a possibility of increase in the prices of petrol, high speed diesel (HSD), kerosene and light diesel oil (LDO). This situation may arise after the International Monetary Fund (IMF) demanded that Pakistan impose an 18 percent sales tax on petroleum products, which would result in an increase in prices by Rs 50 per litre.

According to media reports, the IMF has rejected Pakistan’s proposal to impose 1-2% sales tax on petroleum products and has expressed its desire to charge a higher rate of 18%.

The government has avoided implementing the IMF’s demand, at least for now. However, the IMF’s stand has jeopardized the $5-6 billion upgrade plans under the Brownfield Refinery Policy 2023.

Local refineries have lamented that the proposed change to zero-rated exemption for sales tax on petroleum products has already increased operational and project costs, resulting in the cancellation of a $1.65 billion concession package under the ESCROW account. has gone

The IMF has also suggested a 15 percent sales tax on food items, but the federal government has not yet paid much attention to the issue.

On the other hand, the government is considering reducing the petroleum levy from Rs 45 per liter to Rs 60 per liter while there is also talk of imposing a sales tax equivalent to 18 percent. The IMF did not object to this adjustment when provided.