Petrol pumps may not accept cash for fuel purchase in Pakistan

Petrol pumps may not accept cash for fuel purchase in Pakistan

Pakistan is contemplating a potential restriction on cash payments for fuel purchases at petrol pumps as part of an effort to promote digitalization and curb financial irregularities.

Sources on Sunday said a tax reform commission has proposed measures in the 2023-2024 budget to reduce cash-based transactions.

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The Reform and Revenue Mobilization Commission (RRMC) highlighted that currently, petrol stations across Pakistan accept cash payments for fuel purchases. However, this practice not only creates opportunities for tax evasion and undocumented transactions but also poses challenges in tracking cash-based transactions, potentially leading to financial irregularities.

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In light of these concerns, the commission has recommended that petrol stations nationwide should discontinue accepting cash payments for fuel purchases. Instead, customers should be encouraged to utilize electronic banking, credit/debit cards, or other digital payment methods. The proposal aims to foster a more transparent and documented economy while mitigating the risks associated with cash transactions.

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To facilitate the transition to cashless transactions at petrol stations, the Federal Board of Revenue (FBR), the State Bank of Pakistan, and relevant stakeholders are urged to collaborate in establishing a comprehensive framework. This collaborative effort would ensure a seamless implementation of the proposal, promoting the adoption of digital payment methods throughout the country’s petrol pump network.

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Furthermore, the commission has suggested that Oil Marketing Companies consider issuing prepaid fuel cards or prepaid debit cards. These alternatives would offer customers a convenient and secure way to make fuel purchases while further supporting a transparent and documented economy.

By discouraging cash payments and encouraging digital transactions, Pakistan aims to create a more accountable business environment, reduce tax evasion, and enhance financial transparency. The proposed shift toward digitalization at petrol pumps aligns with global trends and showcases the country’s commitment to embracing technology for economic progress.

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As the government explores these proposals, further discussions and consultations with relevant stakeholders will likely shape the final implementation strategy, with the objective of effectively integrating digital payment systems into the fuel purchasing process at petrol pumps throughout Pakistan.

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