ISLAMABAD: The government has hiked the Petroleum Development Levy (PDL) on petrol and diesel from Rs 50 to Rs 55 per liter from July 1, 2023, amid the prospect of moving towards a comprehensive agreement with the IMF on a new bailout package. Considering doing it. .
Although the government appears confident of securing the IMF’s agreement on a new standby arrangement (SBA) for a short period of six to nine months, it has raised the PDL from Rs 50 from the start of the next fiscal year. 55 rupees per liter. 1 July 2023.
By the Finance Act 2023-24, the Government sought powers in the Fifth Schedule to amend the Petroleum Products (Petroleum Levy) Ordinance, 1961 (XXV of 1961), in column (1) by which the Government may increase the petroleum Authority is available. Levy
Earlier, Parliament’s approval was required to set the maximum limit for petroleum levy. Now the Finance Ministry informed the Senate Standing Committee on Finance that to achieve the target of Rs 879 billion for the next financial year, the petroleum development levy has been increased by Rs 60 per liter, which is a revised Rs 542 billion. is against the target. 2022-23 ending on 30 June.
The question arises whether the government has received the Memorandum of Economic and Financial Policies (MEFP) for a fresh bailout package under the SBA program for the next six to nine months? Without a broader agreement on the MEFP, a staff-level agreement cannot be signed. Pakistani officials claimed that the two sides exchanged the draft MEFP several times, but it is still unclear whether it is related to the ninth review of the expired Extended Fund Facility or the fresh SBA program.
Pakistan and the IMF held consultations on Tuesday night to finalize the two options. With the waning prospects of meeting the ninth review under the $6.5 billion EFF program, which ends tomorrow (Friday), Pakistan and the IMF will have to wait for the next six to nine months under the $2.5 billion SBA program. A new bailout package will have to be entered into. The period must prevent balance of payment crises and defaults in the next six month period.
