The federal government has decided to keep domestic petroleum product prices unchanged and maintain current petroleum levy rates as part of a strategy to control Pakistan’s import bill amid potential global oil price volatility.
Government officials believe that reducing the petroleum levy during periods of high international oil prices typically leads to increased local consumption, which negatively impacts the country’s import bill. By maintaining higher prices, the administration aims to discourage excess demand for petroleum products.
The finance ministry has proposed implementing a transparent pricing formula for petroleum products that clearly outlines the levy component. This approach is designed to keep both the public and parliament informed about any adjustments, potentially securing continued political and public support even during periods when prices increase.
Last month, the government raised the petroleum levy on petrol and high-speed diesel by Rs. 10 per litre, bringing the total levy to Rs. 70 per litre for both fuels.
Officials emphasized that a consistent and transparent petroleum levy policy is essential for maintaining fiscal discipline and controlling excessive fuel consumption, particularly during periods of high global oil prices.
