ISLAMABAD: Eyeing the release of the much-awaited $1.18 billion tranche from the IMF, government has increased the petroleum development levy (PDL) on petrol by Rs10-20 and diesel by Rs5-10 per litre, an official told The News.
The new build-up in prices of high speed diesel (HSD) and motor spirit (MS) notified from August 1, also available with The News, unfolds that the government has hiked PDL on petrol up to Rs20/litre and on diesel Rs10/litre. It also revealed that dealers margin on petrol was increased by Rs2.10-Rs7 per litre from Rs4.90/litre.
However, diesel margin was not increased for in dealers, which remains at Rs4.13/litre. The government also did not increase sales tax on both the POL products.
The senior official of the Ministry of Finance said that government was bound to increase PDL on both petrol and diesel by Rs50/litre to achieve the target of Rs850 billion under IMF conditions.
Subsidies on POL products and electricity announced by ex-premier Imran Khan on February 27, 2022, from March 1 up to June 30 have already been done away with. In addition, the sitting government also increased the electricity base tariff by Rs7.91/unit in phases, and to this effect, it has also increased Rs3.50/unit from July 26.
Government might also increase Rs3.50/unit in the current month before the meeting of the IMF’s executive board. And the remaining Re0.91/unit would be increased from September 1, 2022. The government desperately wants the release of a tranche of $1.18 billion from the IMF in the current month of August, which was why it hiked PDL.
Earlier, the levy on petrol was at Rs10, which has now been increased to Rs20 and on diesel, it was Rs5 which was raised to Rs10. The IMF executive board meeting is scheduled on August 25-26 for approval of Pakistan’s case. However, COAS General Qamar Bajwa’s call to the US Deputy Secretary of State Wendy Sherman seeking Washington’s push for the release of the IMF tranche, indicates that no immediate meeting of the executive board can be arranged as all members are on leave for summer vacation.
Their vacations will end on August 12 and before August 20, an executive board meeting can be arranged to look at Pakistan’s case. The country’s reserves have tumbled to $8.5 billion with an exchange rate at Rs238.75/dollar in the interbank market, inflation up to 14-year high at 25 percent, and circular debt in the power sector at Rs2.5 trillion, which in the gas sector is at Rs1.5 trillion.
