Petrol and diesel prices in Pakistan are expected to increase from December 1 as the government considers introducing a sales tax on petroleum products. The potential tax changes come as part of efforts to meet financial targets under agreements with IMF.
Reports suggest that the government plans to impose an 18% sales tax on fuel, replacing the current petroleum levy. This move follows the IMF’s rejection of a proposed 1-2% sales tax, pushing the authorities to comply with higher rates. The implementation of the tax is crucial for securing international funding and supporting refinery upgrade projects worth $5-6 billion.
Currently, petrol is priced at Rs 248.38 per liter, while diesel costs Rs 255.14 per liter. If the sales tax is enforced, it will replace the petroleum levy, reducing it by Rs 15 per liter but slightly increasing the overall cost of fuel.
These price adjustments are expected to have significant implications for the energy sector and the economy, potentially affecting transportation costs, inflation, and household budgets. The timing of the increase comes as the country is already grappling with economic challenges and rising living costs.
Earlier this month, the government chose to keep fuel prices steady, offering temporary relief to consumers. However, the proposed tax measures indicate that price hikes may be inevitable as the country works to stabilize its financial situation and adhere to international agreements. Consumers are advised to prepare for potential changes in fuel costs as December approaches.
