KARACHI: The prices of petroleum products in Pakistan are likely to increase due to planned implementation of petroleum levy and sales tax from July 01, 2022.
The National Assembly on Wednesday passed the Finance Bill 2022, which enabled the government to impose petroleum levy up to Rs50 per liter on petroleum products.
At present the government is not charging a levy on sale of petroleum products.
Besides, the sales tax is also at the minimum level of zero per cent on petroleum products.
The previous government of PTI had kept both the petroleum levy and sales tax at zero in order to provide relief to the masses. The PTI government also provided a huge subsidy on prices of petroleum products in order to lower the rates and provide relief to the masses.
However, former Prime Minister Imran Khan was removed through a vote of no-confidence motion on April 10, 2022.
Since then the new coalition government led by PML-N increased the prices of petroleum products sharply on three different occasions.
The new government of Prime Minister Shehbaz Sharif increased the prices of petroleum products on May 26, 2022, June 02, 2022 and June 15, 2022. Cumulatively, the government increased the price of petrol by 84 per liter in these price hikes.
The present government in the budget estimated to collect Rs750 billion as petroleum levy during the fiscal year 2022/2023. As this fiscal year is starting from July 01, 2022, it is likely that the government will opt to impose the levy from this date.
Shaukat Tarin, former finance minister during PTI tenure said that on the demand of the International Monetary Fund (IMF) the government was increasing the rates of petroleum products. The government will further increase the prices of petroleum products to Rs300 per liter.
In a Tweet he said: “IMF wants more prior actions before they even consider taking the proposal to their board. Rs 855 billion Petroleum Development Levy (PDL) and 11 per cent sales tax. Will push cost to Rs300+/litre. Immediate increase in electricity prices. Rs800 billion provincial surpluses signed off by provinces, when they showed only Rs80 billion.”
Previously, the government announced the increase of the price of diesel to Rs263.31 per liter effective from June 16, 2022. The rate of high speed diesel had been increased by Rs59 per liter. The rate of this product was Rs144.16 as of May 26, 2022. A cumulative increase of Rs119 during the past 20 days. Similarly, the price of petrol increased by Rs84 to Rs233.89 from Rs149.89 as of May 26, 2022.
New prices of petroleum products with effect from June 16, 2022 are as follows:
i. MS ( Petrol) Rs. 233.89/Liter
ii. High Speed Diesel(HSD) Rs. 263.31/Liter
iii. Kerosene (SKO) Rs. 211.43/Liter
iv. Light Diesel Oil (LDO) Rs. 207.47/Liter.