IMF Demands Higher Sales Tax on Petrol

Web Desk | 5 months ago

Pakistan’s plan to upgrade domestic oil refineries faces serious risk.The project requires billions of dollars in investment.However, the IMF has imposed strict new tax conditions.These include an 18% sales tax on petroleum products.Officials warn the demands could derail the entire plan.

Meanwhile, the IMF has rejected tax relief on imported machineryThat equipment is essential for refinery modernization.Officials say this decision creates major uncertainty.They stress the upgrades are vital for energy security.Without them, fuel quality will remain poor.

As a result, fuel prices could surge sharply.The government warns of an added 2% sales tax.Petrol prices could rise by Rs47.50 per liter.Diesel prices may increase by over Rs50 per liter.Such hikes would worsen inflation and living costs.

Sources say the IMF linked taxes to guaranteed investor returns.It reportedly seeks a 72% return on refinery investments.Officials argue this makes projects financially unviable.They say no local refinery meets Euro V fuel standards.Upgrades require nearly $6 billion in total investment.

Currently, Pakistan relies heavily on fuel imports.The country imports 70% of its petrol needs.It also imports 30% of diesel daily.Experts warn dirty fuel harms health and the environment.Officials say refinery upgrades remain urgently needed.

Read more : Government Reduces Petrol and Diesel Prices for Next 15 Days

The government of Pakistan has announced new rates for petroleum products for the next 15 days, aiming to give some relief to the public. The official notification explains that small reductions have been approved, and the goal is to maintain stability in petroleum prices in Pakistan during the current economic situation.

According to the Petroleum Division, a new notification has been issued confirming changes in petrol and diesel prices. The government reviewed international market trends before finalizing the revised rates.