Although the government has raised the price of petroleum products by Rs. 30 per litre, it has yet to collect the petroleum development levy and general sales tax (GST) from consumers.
Despite the increase in the price of petroleum products, the government has not totally eliminated gasoline subsidies, according to Ministry of Finance sources.
On various petroleum products, the government provided a subsidy of Rs. 86.71 per litre. According to sources, after the rise, the subsidy on High-Speed Diesel (HSD) was lowered from Rs. 86.71 to Rs. 56.71 per litre.
Similarly, the petrol subsidy has been reduced from Rs. 47.20 per litre to Rs. 17.2. Light Diesel Oil (LDO) subsidy has been reduced from Rs 67.84 per litre to Rs 37.84 per litre. Similarly, the kerosene oil subsidy has been lowered from Rs. 51.83 to Rs. 21.83 per litre, according to sources.
After recent talks, Pakistan and the International Monetary Fund (IMF) were unable to achieve an agreement on an economic bailout, owing to the government’s ambivalence on fuel and energy subsidies. The elimination of fuel subsidies will almost certainly pave the way for an IMF bailout.