The government will suffer an Rs. 300–350 billion shortfall in the Petroleum Development Levy (PDL) due to a 22% decline in petroleum consumption, according to estimates from the International Monetary Fund (IMF). Another spike in petroleum prices is expected to follow from this.
The IMF has also noted the government’s unwillingness to impose a maximum tax on all petroleum products.
Despite an anticipated decline in non-tax revenue in the form of PDL in the current fiscal year, the Federal Board of Revenue (FBR) budgeted a target of Rs. 7.4 trillion has not changed to date.
Although income in the first quarter was only Rs. 470 billion, the government had anticipated a Rs. 855 billion PDL collection.
The maximum price for MS fuel and HOBC has been increased by the government to Rs. 50 per liter. The revised forecast indicates that the government might bring in up to Rs. 500 billion during this fiscal year.
The administration blamed the ongoing floods that disrupted trade and commerce across Pakistan for the decline in revenue.
The administration will modify the macroeconomics and framework for the current fiscal year in the wake of the severe floods. The floods resulted in a revision to GDP growth of up to 2%, with inflation remaining steady at an average of 23 to 25%.
As the government struggles to deal with the collapsing economy and Oil Marketing Companies, the current situation points to an expected increase in the price of petroleum products.