IMF wants an Rs49bn increase in Petroleum Development Levy collection
Business
Target can be achieved by a hike in rate or by encouraging consumption
ISLAMABAD (Dunya News) – The International Monetary Fund (IMF) has come up with another condition to reduce fiscal deficit – increase the Petroleum Development Levy (PDL) collection – as Pakistan continues to meet the criteria set by the world’s top financial institution.
Sources in finance ministry say the move will escalate the PDL target for the current fiscal year of 2023-24 by Rs49 billion – from Rs869bn to Rs918bn.
However, the PDL collection can in two ways – by increasing the rate charged on per litre sale or by encouraging consumption at a time when the overall domestic demand is on a slide.
But the problem is the fact that consumption of petroleum products – just like power and gas – is on a decline due to a crippled economy and worsening cost-of-living crisis as both businesses and ordinary consumers are grappling with the challenge how to tackle the persistent inflation.
In case of a hike in PDL on per litre sale during 2023-24, the caretaker setups may opt for introducing an ordinance, if it takes the decision before the new elected government assumes the charge as a result of the February 8 general elections.
At the same time, the sources say the PDL can witness an increase in the next financial year, 2024-25 and the two sides are in full agreement on the enhancing the target in the Memorandum on Economic and Financial Policies (MEFP).
