There is chaos in the world, then how did Pakistan reduce the price of petrol by Rs 22? Know the whole tax game!

Amidst the tension in the Middle East, while fuel prices are skyrocketing across the world, a shocking news has come from Pakistan. The government has given great relief to the public by reducing the prices of petrol and diesel by a huge Rs 22 in one stroke. But is this really a big relief, or is there a big tax game hidden behind it? Let us know the complete inside story of this cut…

One of the main reasons for this big reduction in the prices of petrol and diesel was the fall in international crude oil rates. As the global oil market experienced a temporary slowdown, the Government of Pakistan decided to pass on a portion of the profits directly to consumers. The occasion gave officials a chance to announce a big, one-time price cut of Rs 22 per litre.

Total tax around 125 Pakistani rupees per liter

This cut in fuel prices, announced just before Eid, was introduced as a relief measure for the public. Millions of people travel this festive season, and inflation is already putting a heavy burden on household budgets. As a result, the government aimed to reduce transportation costs and lighten the economic burden on ordinary citizens. Despite recent price cuts, fuel remains heavily taxed in Pakistan. According to reports, the total tax burden on petrol alone is around PKR 125 per litre. A large part of the retail price that consumers pay for fuel goes directly to the government exchequer through various levies, duties and surcharges.

A major component of Pakistan’s fuel taxation structure is the ‘Petroleum Levy’. This levy was implemented as per the conditions set by the International Monetary Fund (IMF). In recent months, this levy had reportedly even crossed the level of Rs 117 per litre. According to the Prime Minister’s Office of Pakistan, strong domestic tax collections helped create the necessary fiscal flexibility to provide temporary relief on fuel prices. In addition to the petroleum levy, Pakistani consumers also pay customs duty and climate-related surcharge when purchasing fuel. A separate “climate levy” of about Rs 2.5 per liter has also been imposed.

The post There is chaos in the world, then how did Pakistan reduce the price of petrol by Rs 22? Know the whole tax game! appeared first on Latest.