Levy on high-octane fuel raised by Rs200 per litre

ISLAMABAD: Prime Minister Shehbaz Sharif on Sunday announced an increase in the levy on high-octane fuel, a premium-grade petroleum product with a higher octane rating, used mainly in luxury and high-performance vehicles, by Rs200 per litre.

According to a statement issued by the Prime Minister’s Office (PMO), the decision was taken during a virtual meeting chaired by the premier to review the pricing of high-octane fuel used in “luxury vehicles”.

“The prime minister took notice that the levy on high-octane fuel used in the most expensive vehicles should be increased,” the statement said.

The levy, previously set at Rs100 per litre, has now been raised by Rs200, taking the total levy to Rs300 per litre.

“This decision will save the government Rs9 billion per month and as per the prime minister’s instructions, will be used to provide relief to the public,” the PMO said.

It added that the move was aimed at reducing the economic burden by shifting it to higher-income groups. “The richest class in the country will bear the burden,” the statement said.

The PMO emphasised that fuel prices for ordinary vehicles used by lower- and middle-income groups had not been increased, and the move would not impact public transport fares or air travel costs.

The statement added that the premier had directed the relevant ministry to prepare an action plan after taking notice of high-octane fuel pricing.

The decision comes amid government efforts to manage the economic impact of rising global oil prices following the US-Israel war on Iran, which has triggered a fuel crisis.

Two weeks ago, the government announced austerity measures, including a 50 per cent cut in fuel allowances for official vehicles and the introduction of a four-day work week for government offices. It was also decided that 50pc of public sector employees would work from home, except those providing essential services.

On Thursday, the government had appealed to the public to adopt fuel-conservation measures to “avert the risk of petroleum products’ supply getting affected in the coming days”.

A day later, PM Shehbaz said that he had rejected recommendations for further increasing the prices of petroleum products.However, he said he had instructed relevant ministries to devise a mechanism to ensure that the “relief” was restricted to only the deserving and needy.

In a televised address on Sunday, Finance Minister Muhammad Aurangzeb said the government was now moving toward such “targeted relief” so that benefits are passed on to the deserving.

Referring to the prime minister’s address, Mr Aurangzeb noted that the government had already absorbed a significant financial impact. “He spoke clearly and said that the government has taken on Rs69bn of the burden using our own fiscal resources,” the finance minister said.

Mr Aurangzeb said daily meetings were being convened to manage the crisis, covering procurement, logistics and diplomatic efforts to ensure stable supplies. The country was “in a good place until April in terms of the supply situation,” he said.

He warned, however, that hope was not a sufficient plan for a crisis that could last for weeks or months. “Hope is not a strategy,” Mr Aurangzeb said. “This is why we need to pursue a structural solution and take firm, lasting steps to move this situation toward permanence, given our resources.”

The minister expressed gratitude for public suggestions on fuel rationing and price transmission, pledging that the government would consider them. “As we say, never let a good crisis go to waste,” Aurangzeb said.

He also called on the country’s private sector to contribute to the conservation efforts. “I again req­uest my friends, brothers and sisters in private sector leadership, please step up,” he said. “We have to come together and lift this country out of this crisis.”

Finance minister comments followed a press briefing on Saturday, where Petroleum Minister Ali Pervaiz Malik and Information Minister Attaullah Tarar outlined the government’s strategy.

Mr Malik said the prime minister has asked the nation to display a responsible attitude in light of the energy crisis.

“There is a scarcity of energy. If we avoid travelling, try to opt work from home, continue the usual work in universities with e-learning and avoid the unnecessary entertainment it is equal to saving a dollar that we have earned or managed it from somewhere to arrange for the fuel,” Mr Malik said.

He said the time had come to decide whether the government protects those with massive resources or those who earn a livelihood with hard work, such as “bike riders and those driving rickshaws.”

Mr Malik said that despite the closure of the Strait of Hormuz, Deputy Prime Minister and Foreign Minister Ishaq Dar had arranged for an uninterrupted supply of crude oil from Saudi Arabia and the United Arab Emirates.

Addressing the same briefing, the information minister praised the “timely decisions” by the prime minister to replenish oil reserves and said the austerity measures taken by the government had already ensured savings of Rs27 billion in a special fund.

Mr Tarar warned that the absence of a shortage did not mean resources should be misused and urged the public to adopt fuel conservation measures like carpooling.

“Those who own more than one car should prefer vehicles with lower fuel consumption to reduce fuel usage,” he said.