ISLAMABAD: The government has prepared a plan to prevent increase in import bill by keeping prices of petroleum products intact, not reducing the rate of petroleum levy, thus preventing increase in demand.
The government will take parliament and public into confidence on the process of changing prices of petroleum products. It will help the government maintain political and public support at the time of high prices, says the finance ministry sources.
They said, “The government shall establish a transparent formula for petroleum products, including the petroleum levy. Committing to planned petroleum levy rates and communicating any changes to the public and parliament can help maintain political support even at the times of oil price hikes. Higher global oil prices increase the import bill, which can be managed by rationing demand through higher prices. By lowering the petroleum levy during periods of high oil prices, consumption inadvertently rises above optimal levels. Therefore, the government plans to maintain transparency and consistency in petroleum levy rates for effective fiscal management and building public trust.”
According to sources, the finance ministry is of the view rising global oil prices increase the import bill. It can be controlled through rationing by keeping prices of petroleum products high.
High prices of petroleum will prevent an increase in demand for its products, which will help prevent any raise in import bill.
Sources said reducing petroleum levy at a time of high oil prices will increase consumption. The government plans to maintain consistency and transparency in petroleum levy rates for effective fiscal management, the sources said.
The government last month increased the petroleum levy on petrol and high-speed diesel by Rs10 per litre (from Rs60 to Rs70). Kerosene oil is subject to a petroleum levy of Rs10.96 per litre and light diesel oil Rs7.75 per litre.
As part of additional levy, the federal cabinet approved a reduction in the prices of electricity by Rs1.71 per unit for three months (April to June 2025).
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