Petrol and Diesel Prices Surge Again as Govt Raises Taxes to Meet IMF Targets

The government has increased petrol and diesel prices by Rs. 26.77 per litre, driven partly by higher taxes on petrol to meet fiscal targets under the International Monetary Fund program.

The latest revision pushed petrol price to Rs. 393.35 per litre from Rs. 366.58, while high-speed diesel was raised to Rs. 380.19 from Rs. 353.42 per litre for the week ending May 1.

The increase comes despite earlier estimates suggesting prices could fall, with petrol expected to decline by around Rs. 6 per litre and diesel by about Rs. 25 per litre based on global trends. Instead, the government raised the petroleum levy on petrol by about Rs. 27, increasing it from Rs. 80 to Rs. 107.38 per litre to support revenue collection in the final months of the fiscal year.

With this change, total taxes on petrol have reached around Rs. 135 per litre, while taxes on diesel stand at about Rs. 65 per litre, including petroleum levy, customs duty, and climate support charges.

Officials said the move is linked to commitments with the IMF, whose executive board is expected to approve over $1.2 billion in funding in early May. The petroleum division issued the notification quietly, even as regional tensions continue to push global oil prices higher.

Petroleum Minister Ali Pervez Malik said the government had absorbed rising international prices for as long as possible but had to pass on the burden due to limited fiscal space.

He added that fuel prices have remained volatile since late February, when geopolitical tensions triggered sharp increases in global oil markets.