Attention Pakistan! You might face another round of petrol price hikes, potentially pushing fuel costs to new highs. This echoes the situation in 2023, when petrol prices reached a historic peak of Rs. 331.38 per liter to fulfill IMF requirements. Global oil trends and the weakening Rupee were also contributing factors. This surge triggered a domino effect on the economy, burdening the masses with rising living costs.

And before the newly formed government start negotiations with the IMF for an extended program. The IMF has reportedly recommended to increase general sales tax (GST) from 0% to 18% on several dozen items, including petroleum products.

Media reports suggest the IMF estimates this “rationalization” of GST rates could generate revenue equivalent to Rs. 1,300 billion, contributing 1.3% to Pakistan’s GDP. However, the IMF hasn’t assessed the potential inflationary impact of this indirect taxation.

It’s crucial to remember that citizens already pay significant taxes on petrol, with Rs. 83.52 per liter, including a Rs. 60 petroleum levy. Currently priced at Rs. 279.75, petrol prices could soar with the imposition of an 18% GST, further straining the inflation-stricken population.

Latest Revision in Petrol Prices

A recent announcement by the caretaker government confirmed a Rs. 4.13 increase in petrol prices, bringing the new rate to Rs. 279.75. Diesel prices, however, remained unchanged.

This situation carries significant weight for Pakistan, a nation heavily reliant on oil imports (around 85%). With a struggling economy and inflation exceeding 28.3% in January, even small price changes significantly impact the population. While the IMF deal aims to stabilize the economy, it comes at a cost, including higher taxes and energy costs, posing a significant challenge for Pakistanis.

The potential impact of these hikes extends far beyond the pump. Transportation costs for essential goods and services will likely rise, further pressuring household budgets. Additionally, businesses reliant on fuel for operations could face increased costs, potentially impacting employment and overall economic activity.

What do you think about the upcoming hike in petrol prices? Tell us in the comments section.