Sharp rise in petrol, diesel prices in Pakistan

ISLAMABAD: The federal government on Tuesday raised the prices of petroleum products, with a significant hike in diesel rates.

According to a notification issued by the Finance Division, the price of petrol had been hiked by Rs5.36 per litre, while high-speed diesel (HSD) has seen a sharp rise of Rs11.37 per litre.

Following the revision, the new price of HSD stands at Rs284.35 per litre.

The price hike comes amid fluctuations in global oil markets and is likely to impact transportation costs and inflation across the country.

The revised prices have come into effect from midnight (today).

Also read: Govt expected to increase petrol price by up to Rs5 per litre this week

Earlier, on July 1, the government raised petrol prices by Rs8.36 per litre. High-speed diesel went up by Rs10.39. Petrol now sells for Rs266.79 per litre, and diesel for Rs272.98. The government had blamed the rise on global crude oil trends.

At that time, a Rs2.50 per litre carbon levy was added on petrol. But the petroleum levy was cut by the same amount. The overall tax burden stayed the same, and the sales tax remained at zero.

Earlier, the Asian Development Bank (ADB) has recommended the government to implement a uniform 5 per cent general sales tax (GST) on all digital transactions to promote digital payments and e-commerce platforms across the country, reduce cash-related inefficiencies and document the economy.

In its recent report titled ‘Pakistan’s Digital Ecosystem’, released on Tuesday, the ADB warned that heavy and unsustainable taxes on digital infrastructure in the country pose a serious threat to foreign investment, growth and the spread of digital services.

The report states, “Pakistan’s digital infrastructure faces a major challenge from high taxation. Federal and provincial taxes on this sector are among the highest in the world and in the region, and tax policies are generally inconsistent.”