Pakistan drops petrol bomb on citizens; diesel price surges to ₹280 per litre
2 min read . Updated: 16 Feb 2023, 05:02 AM IST
Premium- Pakistan's mini-budget: Sales tax on general items has been increased to 18%
- Federal excise duty on air travel (club, business, and first-class) has been increased to 20% of the airfare
Cash-strapped Pakistan has dropped a petrol bomb on inflation-hit citizens after unleashing a mini-budget on Wednesday night.
The prices of petrol and gas in Pakistan have skyrocketed in a bid to appease the International Monetary Fund (IMF) for unlocking the critical loan tranche.
According to the Geo news, the petrol has been increased to ₹272 per litre after an increase of ₹22.20, Pakistan's Finance Division said. It said that the hike in fuel prices has taken place due to the rupee's devaluation against the dollar.
The price of high-speed diesel has been increased to ₹280 per litre after a hike of ₹17.20. Kerosene oil will now be available at ₹202.73 per litre following a ₹12.90 hike. Meanwhile, light diesel oil will be available at Rs196.68 per litre after an increase of ₹9.68.
It must be noted that fuel price hike was one of the preconditions of the Washington-based lender, which will lead to a hike in the already record-high inflation, coupled with the new fiscal measures undertaken through the 'mini-budget'.
On Thursday, 16 feb, final rounds of talks between Pakistani authorities and IMF will be held to finalize the ninth review of the Extended Fund Facility (EFF). If approved then it would pave way for a $1.2 billion tranche for the country.
Through the "mini-budget", the Pakistan Democratic Movement (PDM)-led federal government aims to reduce the budget deficit and broaden its tax collection net.
Pakistan presents mini-budget ahead of IMF talks. Key announcements
1. Sales tax on general items has been increased to 18% from 17%.
2. Sales tax on mobile phones with a value exceeding US$500 will be set at 25%, against 17% earlier.
3. Essential items (Wheat Flour, rice, egg, milk, chicken, and vegetable) are exempted.
4. A 10% advance tax will be applicable on all functions and gatherings including wedding events and seminars.
5. Federal Excise Duty on aerated water is proposed to be increased to 20% from 13%.
6. Minimum price on cigarettes: No brand shall be priced and sold at a retail price (excluding sales tax) lower than 60% (previously 45%) of the retail price.
7. Federal excise duty on sugary drinks introduced at 10% of the retail price.
8. Federal excise duty on air travel (club, business, and first-class) has been increased to 20% of the airfare or PkR50,000/ticket, whichever is higher from the earlier held PkR50,000/ticket.
9. Petrol rate has been increased by ₹22.20 to ₹272 per litre from Rs249.80
10.High-Speed Diesel (HSD) rate has been increased by ₹17.20 per liter to ₹280 per litre from ₹262.80.
11.The rate of Kerosene oil has been enhanced by ₹12.90 to ₹202.73 per litre from ₹189.83.
12.The price of light diesel oil (LDO) has been increased by ₹9.68 to ₹196.68 from ₹187.