Immediate cut in petroleum levy ruled out; phased reduction in next budget under review

ISLAMABAD: Federal Minister for Planning Ahsan Iqbal said on Thursday that the petroleum levy rate will not be cut immediately under pressure from Jamaat-e-Islami. However, a phased reduction will be considered in the next budget.

Speaking to the media, he said a committee had been formed for this purpose. It will review workable proposals. The government side will include Deputy Prime Minister Ishaq Dar, Ahsan Iqbal and Rana Sanaullah, while Jamaat-e-Islami will nominate three representatives. He said giving relief to the public was a shared goal of both sides.

Jamaat-e-Islami has been protesting against the heavy levy at a time when global prices have risen because of tension in the Middle East. Its delegation also met the prime minister earlier this week.

Ahsan Iqbal said the economic situation, which had been stabilised with difficulty, could not afford the mistakes of the past. He said no decision should be taken for short-term public applause that could become a major crisis for the country tomorrow. He said about 12.7 million people had been registered in the relief scheme for low-income groups.

At present, a levy of Rs80 per litre, a climate levy of Rs5 and customs duty of Rs20.56 are being charged, about Rs106 in total.

Meanwhile, Petroleum Minister Ali Pervaiz Malik said in a written reply in the National Assembly that Rs4.4 trillion was collected as petroleum levy from the financial year 2022-23 to 2025-26. This was Rs227 billion more than the target of Rs4.2 trillion. In the last financial year, provisional collection was Rs1.567 trillion against a target of Rs1.468 trillion. The estimate for the current financial year is Rs1.676 trillion.

According to the petroleum minister, levy collection is also part of the fiscal targets set under the IMF’s Extended Fund Facility programme.