The federal government has agreed to raise the petroleum development levy (PDL) on petrol by Rs 5 per liter. This means that the new PDL will cost Rs. 55/liter rather than the current Rs. 50. The decision was made following the conclusion of a $3 billion staff-level agreement on Friday between Islamabad and the International Monetary Fund (IMF).
According to media sources, the new PDL will go into effect on July 1, 2023, and mark the start of the next fiscal year. The current petrol tax in Pakistan is as follows.
Meanwhile, the finance ministry has announced that the PDL on high-speed diesel (HSD), which is now Rs. 50/liter, will not be increased.
Petrol and Diesel Prices
Previously, Finance Minister Ishaq Dar declared a Rs. 7.50/liter rise in diesel costs, but no change in petrol pricing. The minister stressed the need of ensuring that the advantages of these price cuts are felt by the people in several industries.
He urged transportation companies and other diesel-consuming businesses to pass on the savings to customers in the form of reduced fares, allowing all sectors of the economy to benefit from this beneficial trend. It is worth mentioning that the government has kept fuel prices constant since April 30, although high-speed diesel rates fell by Rs. 5 per liter during that time.
The recent dip in overall oil sales in Pakistan has been reason for alarm, with a 47% year-on-year drop in April. Total sales fell by 24% to 13.970 million tonnes from July to April in FY23. The drop in sales has been linked mostly to a major drop in furnace oil and diesel sales.
As the government takes proactive steps to address economic issues, lower gasoline prices provide a glimmer of hope for consumers, alleviating the burden of high living expenditures.
