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Saturday, June 8, 2024

Petrol price expected to reach Rs.290 per liter!

If the situation persists where dollar and petroleum prices are at a rising trend and sales tax of 10.5 percent is imposed in addition to the petroleum levy, then petrol price which is currently at Rs.234 per liter is expected to surge to at least 290 per liter from the beginning of new year.

A private new channel has reported that according to the letter written by the government to the International Monetary Fund (IMF), additional taxes shall be imposed on petroleum products. From 1st Jan 2023, PDL on petrol will be increased from Rs.20 to Rs.50 per liter. The global lender was also assured that the PDL on diesel will rise by Rs.5 per liter per month from July 1 until it reaches Rs.50 per liter on April 1.

Moreover, under the contingency revenue measures agreed upon with the International Monetary Fund (IMF), the government would impose a 10.5 percent GST on petroleum products at first, increasing it to 17 percent if monthly revenue collection data showed signs of underperformance compared to the first quarter of fiscal year 2023 and subsequent targets.

Read more: Foot-dragging by the IMF

If the situation persists where dollar and petroleum prices are at a rising trend and sales tax of 10.5 percent is imposed in addition to the petroleum levy, then petrol price which is currently at Rs.234 per liter is expected to surge to at least 290 per liter from the beginning of new year.

The government has stated explicitly that no further tax amnesties or tax exemptions/concessions will be granted through Statutory Regulatory Orders (SR0s) without prior National Assembly agreement. Furthermore, the government agreed to collaborate with the World Bank to harmonize the service sales tax across provincial jurisdictions.

It is evident that no sector is in safe zone while the government plans to impose hefty taxes to raise revenue and satisfy the global lender. Although economic crisis arose worldwide, but challenges for Pakistan were triggered due to political instability. Political grudges won over the economic prosperity and general public is facing serious consequences. Countrywide protests are already being held for the skyrocketed electricity bills and commodity prices, breaking the backs of citizens.