The federal government has asked the finance ministry to engage with the International Monetary Fund on adjusting petroleum levy structures on gasoline and diesel as the government seeks to shield consumers from rising global oil prices triggered by tensions linked to the conflict involving Iran.
Prime Minister Shehbaz Sharif directed the Finance Division to explore whether any required increase in domestic fuel prices could be offset through changes in existing levies, which currently stand at about Rs. 100 per litre on petrol and Rs. 55 per litre on diesel.
The levies form part of commitments agreed under Pakistan’s IMF-supported economic program.
The move comes after the government has already absorbed a substantial subsidy burden of nearly Rs. 129 billion to keep fuel prices stable for consumers. Recent official briefings suggest that in the past three weeks alone, the government has absorbed around Rs. 125 billion by keeping prices unchanged despite international pressures.
Officials said this relief has been financed through cuts in the development budget and savings generated from other expenditure heads, underlining the government’s effort to shield the public from the full impact of oil market volatility.
This follows Pakistan’s earlier record fuel price increase of Rs. 55 per litre announced in early March after the Middle East conflict disrupted energy flows. The Finance Division has now been tasked with presenting a detailed proposal to the IMF on possible levy rationalization, as the government explores options to avoid passing the latest international oil shock on to consumers.