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Thursday, May 23, 2024

Be ready for another increase in fuel prices!

Fuel prices in Pakistan are projected to rise due to planned implementation of a petroleum levy and sales tax on July 1, 2022

Fuel prices in Pakistan are projected to rise as a result of the planned implementation of a petroleum levy and sales tax on July 1, 2022. The National Assembly passed the Finance Bill 2022 on Wednesday, allowing the government to levy a petroleum levy of up to Rs50 per liter on petroleum products.

At the moment, the government does not collect a tax on the sale of petroleum products. However, petroleum prices were raised by Prime Minister Shahbaz Sharif’s new government on May 26, 2022, June 2, 2022, and June 15, 2022. In total, the government raised the price of petrol by 84 per liter in these price increases.

Read more: Is Shehbaz-Zardari govt increasing petrol prices again by Rs 50?

The current government in the budget estimated to collect Rs750 billion as petroleum levy during the fiscal year 2022/2023. As this fiscal year is starting from July 01, 2022, it is likely that the government will opt to impose the levy from this date.

Moreover, former Finance Minister, Shaukat Tarin said that on the demand of the International Monetary Fund (IMF) the government was increasing the rates of petroleum products. The government will further increase the prices of petroleum products to Rs300 per liter.

He tweeted, “IMF wants more prior actions before they even consider taking the proposal to their board. Rs. 855bn PDL and 11% sales tax. Will push cost to Rs300+/liter. Immediate increase in electricity prices. Rs800bn provincial surpluses signed off by provinces when they show only Rs80bn.”

Read more: Miftah Ismail denies link between fuel price hike, IMF accord

Previously, the government announced the increase of the price of diesel to Rs263.31 per liter effective from June 16, 2022. The rate of high-speed diesel had been increased by Rs59 per liter. The rate of this product was Rs144.16 as of May 26, 2022. A cumulative increase of Rs119 during the past 20 days. Similarly, the price of petrol increased by Rs84 to Rs233.89 from Rs149.89 as of May 26, 2022.