ISLAMABAD: The federal government has projected to generate additional petroleum development levy (PDL) by Rs79 billion by maximizing the limit by Rs10 from Rs50 to Rs60 per litre on petrol and high-speed diesel (HSD) during the current fiscal year 2023-24.

The IMF in its report titled, “Country Report, Request for A Stand-By Arrangement”, says, “Increasing the maximum PDL to Rs60 per litre with the following path of increases to reach an average rate over fiscal year 24 of Rs55 per litre. This will add an extra Rs79 billion”.

The government budgeted Rs869 billion PDL or 0.8 percent of the GDP for the current fiscal year against a revised estimate of Rs542 billion for the last fiscal year 2022-23. The PDL target for the current fiscal year is up by Rs327 billion as compared with the previous year. The next fiscal year 2024-25, the PDL projection is set at Rs 1,008 billion.

The IMF observed that on the fiscal side, deteriorating revenue- particularly the PDL and general sales tax (GST) levied on imported goods and unbudgeted expenditure, including for energy subsidies and immediate relief to those affected by the devastating post-monsoon floods, placed significant additional pressures on the budget.

The IMF report further noted while the devastating floods at the start of the fiscal year 2023 justified urgent relief, additional low-priority spending initiatives (including untargeted subsidies) and delays in implementing agreed revenue measures (e.g., PDL) further delayed necessary fiscal adjustment in the first half of the fiscal year 2023. The PDL increases largely in line with the path chosen at the time of the June 2023 budget.

Copyright Business Recorder, 2023