Budget 2024-25: Govt Proposes Rs. 80/L Levy On Petrol & Diesel

For those who think that petrol prices will go down in the upcoming price revision, here is an update predicting a new crude shock. In the new fiscal budget 2024-25, Finance Minister Muhammad Aurangzeb has proposed a staggering surge of Rs. 20 in levy imposed on petrol and diesel, taking it from the previous Rs. 60 to the new Rs. 80.

The incumbent has been forced to took the step to burden the salaried and middle class of the country under an IMF-recommended reforms to secure the upcoming loan programme with international monetary Fund (IMF).

?

It is related to mention that Rs. 60 per liter levy was also inflicted to appease IMF – seems threshold has been stretched amid a dearth of new ideas about how to enhance revenue through taxation whilst ending subsidies on consumption.

GST on Petroleum Products

Earlier, there were also reports that the government may impose an 18% GST on petroleum goods, which currently stands at 0%. In both cases, the petrol price? will reach a new high creating a situation that doesn’t seem very hopeful for Pakistan’s inflation-stricken commoners already grappling with burgeoning living cost.

Meaning, the consumers are going to witness a reverse effect of consecutive declines in petrol prices in the last some fortnight price revisions.

This situation carries significant weight for Pakistan, a nation heavily reliant on oil imports (around 85%). With a struggling economy and inflation exceeding 28.3% in January, even small price changes significantly impact the population.

Though the IMF deal aims to stabilize the economy it comes at a cost, including higher taxes and energy costs, posing a significant challenge for Pakistanis.

The potential impact of these hikes extends far beyond the pump. Transportation costs for essential goods and services will likely rise, further pressuring household budgets. Additionally, businesses reliant on fuel for operations could face increased costs, potentially impacting employment and overall economic activity.

Current Petrol Prices in Pakistan

In a previous revision, the federal government reduced the petrol price by Rs. 4.74 per liter whilst observing a drop of Rs. 3.86/liter reaching the new price of Rs. 268/liter and 270.22/liter, respectively, comparing the old rate of Rs. 273.10/liter and 266.14/liter.