IMF Recommends GST, Levy Hike: Petrol, Diesel Prices likely to increase

Islamabad: The International Monetary Fund (IMF) has urged the Pakistani government to introduce a general sales tax (GST) on petroleum products and raise the petroleum development levy (PDL) from Rs60 to Rs70 per liter. If implemented, these measures could lead to significant fuel price hikes starting November 16.

An IMF delegation, led by Mission Chief Nathan Porter, met with Pakistan’s Finance Minister Muhammad Aurangzeb in Islamabad. Key officials, including State Minister for Finance Ali Pervez Malik, State Bank of Pakistan Governor Jameel Ahmad, and Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial, were also present.

The discussions primarily focused on the ongoing $7 billion IMF loan program, with updates on Pakistan’s economic progress. Sources reveal that the IMF recommended additional revenue measures to cover budget shortfalls. Among these measures was a proposal to eliminate the monopoly of state-owned companies on LNG imports, paving the way for private-sector participation to foster a competitive market.

Finance Minister Aurangzeb assured the IMF that economic reforms are on track, highlighting that most targets for the first quarter of fiscal year 2024-25 have been achieved. He reiterated Pakistan’s commitment to fully implementing the IMF program.

Sources also indicate that further discussions will address cost-cutting in public sector departments, including the elimination of 150,000 government positions to reduce expenditures. Additionally, updates on the stalled privatization of Pakistan International Airlines (PIA), initially targeted for October 31, are expected.