ISLAMABAD : The Federal Government of Pakistan is planning to hike petrol prices by up to Rs10 per litre again by increasing the petroleum levy, as authorities struggle to deal with a deepening financial crisis in the energy sector.
According to officials, the proposed increase is part of a broader fiscal strategy that will generate revenues and reduce Pakistan’s massive Rs2.8 trillion circular debt in the gas sector. The move is expected to directly impact fuel consumers across the country and could lead to a fresh spike in inflation.
The proposed increase is currently under review by the Finance Ministry and the Energy Ministry, with a formal announcement expected soon. If approved, the revised levy could significantly increase petrol and diesel prices in the coming days.
Officials estimate that the move could generate Rs180 billion in revenue annually, helping the government meet its domestic debt obligations without relying on external assistance.
Inflation is already weighing on households, and further fuel price hikes are likely to spark public anger. Economists have warned that the rise in petrol prices will have a huge impact on transport, food prices and utilities – worsening the cost of living for millions of Pakistanis.
The decision comes amid growing pressure from the International Monetary Fund (IMF), which has called for a clear plan to reduce energy sector debt. Failure to comply could affect the release of the next tranche of the loan, which is crucial to stabilizing Pakistan’s economy.
The government is also in talks with banks to secure loans of up to Rs2 trillion, and is seeking relief on Rs. 800 billion in interest payments.
