Pakistan Fuel Levy Hike & Economic Updates | Geo News, Dawn & More
The Pakistani government on Sunday significantly increased the petroleum development levy (PDL) on high-octane premium petrol, raising it from 100 Pakistani Rupees (Rs) per litre to 300 Rs per litre, a move intended to generate approximately 9 billion Rs in monthly relief amid rising global fuel costs and escalating tensions in the Middle East.
The increase specifically targets high-octane fuel used primarily in luxury vehicles, according to officials. Alongside this, a separate Rs200 per litre levy was imposed on high-octane fuel, effectively increasing the cost for owners of high-end imported cars. This action comes as Pakistan grapples with a fuel crisis exacerbated by conflict in the Middle East, particularly related to the ongoing situation in Iran.
On Friday, the government had already raised consumer prices for both diesel and petrol by approximately 20%, citing higher oil prices driven by regional instability. This earlier increase raised petrol prices to 321 Rs per litre and high-speed diesel to 336 Rs per litre, according to reports.
Pakistan’s Petroleum Minister Ali Pervaiz Malik announced the new fuel prices following approval from Prime Minister Shehbaz Sharif, who has also implemented a weekly price adjustment mechanism. Malik stated that global prices had risen sharply in a short period, creating significant pressure on the country’s economy.
The government is also reportedly preparing a targeted relief package for vulnerable segments of the population, according to sources within the Finance Ministry. Simultaneously, a public appeal has been issued, urging citizens to adopt further austerity measures and cooperate in conserving energy. The government has also assured the public that it is working to ensure a nationwide supply of petroleum products.
The disruptions to global energy supplies are linked to escalating tensions following attacks in the region, including strikes that killed senior Iranian officials. Iran responded with attacks on US military bases in Gulf countries and has also closed the Strait of Hormuz, a critical shipping route for global oil supplies. Officials have indicated that further price hikes may be necessary if the conflict continues.