The Pakistani government is considering increasing the petroleum levy by Rs. 5 per litre to address the Rs. 1.7 trillion gas sector circular debt, according to Express Tribune.
Currently, the petroleum levy stands at Rs. 79.62 per litre on petrol and Rs. 75 per litre on diesel. Under the proposal, these would rise to Rs. 85 and Rs. 80 per litre, respectively. The move requires federal cabinet approval and coordination with the International Monetary Fund (IMF).
Debt Retirement Plan
The Finance Ministry is exploring multiple options to retire the debt:
-
Higher petroleum levy (targeting around Rs. 540 billion)
-
Dividends from state-owned oil and gas companies (expected Rs. 680 billion)
-
Savings from diverted LNG cargoes (around Rs. 415 billion)
Companies contributing include OGDCL (~Rs. 250 billion), Pakistan Petroleum Ltd (~Rs. 230 billion), and Government Holding Private Ltd (~Rs. 200 billion).
IMF Recommendations
The IMF emphasizes timely tariff adjustments and stock retirement to manage the circular debt. Officials also noted that debt reduction depends on recipients waiving interest on late payment surcharges, similar to measures used in the power sector.
Impact on Consumers
If approved, consumers nationwide will face an additional burden on petrol and diesel, as the government aims to retire the principal amount of Rs. 1.7 trillion over six years.
Officials are consulting across divisions, with a final proposal expected soon.
