The National Assembly on Wednesday approved the RS 50/ liter levy on petroleum products, which has shocked the country already riddled with rising inflation.
In lay man terms, the petroleum products right now are being sold at a cost which is equivalent to their prices. The PTI government had been selling petroleum products on a very high subsidy which caused the national exchequer to take quite a plunge.
The PML(N) government as they came to power had some tough decisions to make. One of them was to increase the petroleum prices. This was being done for two reasons. Firstly, to stop the subsidy which was causing a dent in the country’s wallet. Secondly, to do what the IMF had asked the government to do in order for them to secure a loan.
The current price of petrol is 233.89 Rs/Liter and that of diesel is 263.1 Rs/Liter. On these prices, the government isn’t collecting any taxes, which is a standard practice all around the world.
Now the National Assembly has approved a levy of Rs 50/ liter levy on all petroleum products. This would lead petrol to become 283.89/Liter and diesel to be 313.1 Rs/ Liter.
All of this is further dependent on the oil prices in the international market. According to the government, they have imposed this levy because of certain agreements the previous PTI government made with the IMF. Regardless of what the reason is, petrol prices are going to go up.
One thing the government is doing is to not pass over this levy altogether on the public. But according to Miftah Ismail, the levy will be imposed as Rs 5 per month until it reaches Rs 50. So this would be imposed over a period of 10 months, that is if the government keeps its world.