The government of Pakistan has asked the International Monetary Fund to consider suspending the petroleum carbon levy as fuel prices continue to rise in global markets. The request comes during a period of economic pressure and higher energy import costs.
According to Petroleum Minister Ali Pervaiz Malik, Prime Minister Shehbaz Sharif has directed the finance ministry to hold discussions with the IMF on temporarily suspending the levy introduced under the IMF’s Resilience and Sustainability Facility program.
Officials say Pakistan may need to use more furnace oil for domestic energy production instead of exporting it due to current supply concerns. This situation has pushed the government to review its fuel policies to manage energy demand and control rising costs.
At the same time, import premiums on petrol have increased sharply in international markets. Reports show that the premium on imported fuel has risen from around $5 per barrel to about $17 per barrel within a week. If these additional costs are passed to consumers, petrol prices in Pakistan could increase by Rs15 to Rs20 per litre.
However, the IMF has advised Pakistan to allow fuel prices to reflect global market rates and avoid large subsidies. The lender also expects the government to continue collecting its petroleum levy target of about Rs1.468 trillion during the current fiscal year.