The Petroleum Development Levy (PDL) is expected to increase by Rs 5 from July 1, 2023, amid hopes of renewing a broader agreement with the International Monetary Fund (IMF). the news Report
With the chances of completing the ninth review under the $6.5 billion Extended Fund Facility (EFF) program expiring tomorrow (Friday) diminishing, Pakistan and the IMF will have to enter into a new bailout package of $2.5 billion under the Standby Arrangement (SBA). The next six to nine months period.
According to reports, the government is considering raising petroleum duty to Rs 55 per liter on petrol and diesel from Rs 50 as it hopes to move closer to the new SBA program with lenders, which is necessary to avoid balance of payments. Crisis and default over the next six months.
Despite the prospect of securing an IMF deal, the government will have to jack up the PDL from the start of the next fiscal year.
By the Finance Act 2023-24, the Government sought power to amend column (1) of the Fifth Schedule to the Petroleum Products (Petroleum Levy) Ordinance, 1961 (XXV of 1961), which empowered to raise the petroleum levy.
Earlier, Parliament’s approval was required to set the ceiling on petroleum duty. Now the Finance Ministry has informed the Senate Standing Committee on Finance that Petroleum Development Levy has been fixed at Rs 60 per liter to achieve a target of Rs 879 billion in the next financial year as against the revised target of Rs 542 billion for the outgoing fiscal year. 2022-23 ends on 30 June.
The question is when will the government get the Memorandum of Economic and Financial Policy (MEFP) for the new bailout package under the SBA program for the next six to nine months.
Without a comprehensive agreement on the MEFP, worker-level agreements could not be signed. Pakistani authorities claim that the two sides have exchanged draft MEFPs several times, but it is not yet clear whether this relates to the ninth review of the expired EFF or the new SBA programme.
On Tuesday, Pakistan and the IMF held consultations to decide on two options.
