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Petroleum levy likely to increase by Rs 20 per liter, sources

In the federal budget 2024-25, the government is considering to impose sales tax on petroleum products and increase petroleum levy for the next financial year.

Petroleum levy is likely to be increased by Rs 20 per litre, according to the sources.

The sources claim that there is a fear that the relief of reduction in the prices of petroleum products will not be transferred to the people in the next financial year.

In the federal budget 2024-25, the government is considering to impose sales tax on petroleum products and increase petroleum levy for the next financial year.

According to the sources, it has been proposed to impose a sales tax on petroleum products in the next financial year, similarly, the levy can be increased from Rs.60 to Rs.80 per litre.

Sources said that there is a proposal to increase the sales tax on petroleum products in a phased manner in the next financial year, currently, the sales tax rate on petroleum products is zero.

According to the sources, a development levy of 60 rupees per litre is being collected on petrol and diesel, if the sales tax is increased and the levy is increased, then the relief will not be transferred to the people.

It may be noted that the government is already collecting a petroleum levy of Rs 60 per litre on both petrol and diesel, which is the maximum allowable limit under the law. 

During the first nine months ending March 31, the government has 720 billion rupees, and has set a target of collecting 869 billion rupees in the form of petroleum levy on petroleum products during the current financial year under the commitments made with the International Monetary Fund (IMF).

It should be noted that inflation has been on rise amid increase in petroleum and electricity prices. While petrol is mostly used in private transport, small vehicles, rickshaws and two-wheelers and increase in its price has a direct impact on the budget of the middle and lower middle class.

On the other hand, the increase in diesel prices is considered to be a cause of higher inflation, as it is mostly used in heavy transport vehicles, trains, and agricultural engines such as trucks, buses, tractors, tube wells and threshers, as a result, especially prices of vegetables and other food items increase.

Saman Siddiqui

I am a freelance journalist, holding a Master’s Degree in Mass Communication and an MS in Peace and Conflict Studies, associated with the electronic media industry since 2006 in various capacities. Here at OyeYeah, I cover a range of genres, from journalism to fiction to fashion, including reviews, and fact findings. 

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