The International Monetary Fund (IMF) has estimated that the government will face Rs. 300-350 billion shortfall in the Petroleum Development Levy (PDL) due to a 22% petroleum consumption shrinkage. This is likely to result in another increase in petroleum prices.
IMF has also pointed toward the government’s reluctance to enact a maximum levy on all petroleum products.
So far, the Federal Board of Revenue’s (FBR) planned target of Rs. 7.4 trillion has not changed, despite a predicted shortfall in non-tax revenue in the form of PDL in the current fiscal year.
The government anticipated an Rs. 855 billion PDL collection, although, revenue was only Rs. 470 billion in the first quarter.
Following IMF’s instruction, the government increased the maximum charge on MS fuel and HOBC to Rs. 50 per liter. According to the updated prediction, the government could earn up to Rs. 500 billion in the current fiscal year.
The government also blamed relentless floods that hindered Pakistan’s trade and commerce activity for the decreased revenues.
In the aftermath of the devastating floods, the government is to adjust the macroeconomics and framework for the current fiscal year. The floods caused GDP growth to be revised up to 2%, with inflation lingering at 23 to 25% on average.
The ongoing situation indicates an impending petroleum product price hike as the government wrestles with the crashing economy and Oil Marketing Companies. (OMC)