Rise in petroleum levy to bring govt additional Rs90 billion

ISLAMABAD: By increasing the petroleum levy on petrol and diesel, the government aims to collect an additional Rs90 billion in the remaining three and a half months of the current fiscal year.

Since March 16, the PL on petrol has gone up by Rs18.02, from Rs60 to Rs78.02 per litre, while the levy on HSD has risen by Rs17.01, from Rs60 to Rs77.01 per litre. The move is part of a broader plan to generate an estimated Rs300 billion in additional revenue over a full year.

Initially, the maximum cap on the PL was Rs60 per litre. This was increased to Rs70 in the federal budget, but a recent presidential ordinance has removed any upper limit, allowing the government to raise the levy as needed.

Despite the increase in PL, the government managed to reduce the consumer prices of both petrol and HSD by Rs2 per litre for the current fortnight starting May 1, due to adjustments in margins and a minor drop in ex-refinery rates. The ex-refinery price of petrol fell by Rs1.40 per litre and that of HSD by Rs1.93 per litre.

Additionally, the Inland Freight Equalisation Margin (IFEM) was also cut. On petrol, it dropped by 59 paisa, from Rs6.89 to Rs6.30 per litre, and on HSD it was reduced by 26 paisa, from Rs3.59 to Rs3.33 per litre.

The PL remained unchanged during the previous fortnight ending April 30, with petrol being taxed at Rs78.02 per litre and HSD at Rs77.01. No general sales tax (GST) is currently applied to petroleum products.

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