The federal government has directed the Finance Ministry to begin discussions with the International Monetary Fund (IMF) regarding possible adjustments to petroleum levy structures on petrol and diesel, as authorities attempt to protect consumers from rising global oil prices linked to regional tensions involving Iran.
Prime Minister Shehbaz Sharif instructed the Finance Division to examine whether any required increase in domestic fuel prices could be balanced through changes in existing levies. Currently, petroleum levies stand at approximately Rs. 100 per litre on petrol and Rs. 55 per litre on diesel, forming a key component of Pakistan’s commitments under its IMF-supported economic programme.
Officials say the government is exploring ways to reduce the immediate financial burden on citizens without violating programme conditions agreed with the IMF. Any modification to levy structures would therefore require consultation and approval from the lender.
The move follows significant fiscal pressure caused by efforts to keep fuel prices stable despite rising international oil costs. Government briefings indicate that nearly Rs. 129 billion has already been absorbed in fuel subsidies, including about Rs. 125 billion over the past three weeks alone, by maintaining domestic prices below import-adjusted levels.
Authorities noted that the relief measures were financed through reductions in development spending and savings from other expenditure heads, highlighting the administration’s attempt to shield consumers from global energy market volatility.
Pakistan had earlier announced a record fuel price increase of Rs. 55 per litre in early March after disruptions in Middle East energy supply chains drove international oil prices higher. With fresh pressure building in global markets, the Finance Division has now been tasked with preparing a detailed proposal for levy rationalization to present to the IMF.
Economic analysts say the outcome of these negotiations will be critical in determining whether Pakistan can limit further fuel price hikes while maintaining fiscal discipline under its international financial commitments.
Also read: Pakistan Government Imposes Countrywide Smart Lockdown
