The Finance Division on Wednesday moved a summary pursuing up to a 15 percent reduction in petroleum prices with effect from July 16 – one day prior to the 20 by-elections to be held in Punjab that will determine the fate of the Punjab government. This was done on Prime Minister Shehbaz Sharif‘s specific instructions to drop the cost of petroleum products in line with the reduction in their international price.
The Prime Minister will, as usual, make the final choice on this matter.
“Any reduction in the price of petroleum and products will be in line with the IMF agreement with the Petroleum Levy (PL) remaining unchanged at 10 rupees per liter while the reduction in the international price will be passed onto the consumers”, an official of Petroleum Division told.
Currently, there is no sales tax and the PL on petrol is Rs. 10 per liter, and Rs. 5 per liter for HSD, SKO, and LDO, respectively.
In order to meet the financial goal of Rs. 750 billion in the Finance Bill 2022–23, the National Assembly has approved an increase in the maximum limit of PL from Rs. 30 per liter to Rs. 50 per liter.
The government is unlikely to collect Rs. 750 billion from PL in the current fiscal year at the present PL rate, according to sources in the petroleum division, as that would allow maximum recovery of Rs. 14 billion per month.
If the 17 percent general sales tax (GST) is not imposed on these goods, a revenue gap of Rs. 45 billion per month will result.
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