The government is unlikely to provide relief to diesel consumers as it may raise the rate of the petroleum development levy (PDL) by Rs. 20 per liter on January 1, 2023.
The government hike in the levy on high-speed diesel (HSD) to Rs. 50 per liter will fulfill yet another condition of the International Monetary Fund (IMF), reliable sources from the Finance Ministry told ProPakistani.
Sources said the Finance Ministry has an agreement with the IMF to impose a levy of Rs. 50 per liter on diesel by January 2023. If the tax collection target is not met as a result, a sales tax will also be imposed.
It was agreed in the IMF’s seventh and eighth reviews that the government would take contingency measures to keep revenue collection on target.
The lender estimates that Pakistan will face up to Rs. 350 billion funding gap in PDL due to a 22 percent decrease in petroleum consumption. It is worth mentioning that the government raised the maximum levy on MS petrol and HighOctane Blending Component (HOBC) to Rs. 50 per liter in response to IMF instructions.
Diesel is a critical product widely used in the transportation and agriculture sectors, and an upward revision in its PDL will have a direct impact on the lives of the general public. The levy on HSD is currently Rs. 30 per liter.
