Iran War Fears Fuel Petrol Price Hike Concerns, PM Directs Talks with IMF

Prime Minister Shehbaz Sharif has directed the Ministry of Finance to open discussions with the International Monetary Fund (IMF) on restructuring the petroleum levy on petrol and diesel, in a bid to shield the public from the impact of rising global oil prices driven by the Iran conflict.

According to official sources, the Prime Minister on Tuesday instructed the Finance Division to raise the matter with the IMF so that any potential increase in petroleum product prices could be offset by adjusting the existing levy structure.

Sources said the government currently collects a petroleum levy of Rs100 per litre on petrol and Rs55 per litre on high-speed diesel, as part of IMF program conditions.

Officials noted that the move comes after the government has already provided a substantial subsidy of Rs129 billion to keep fuel prices stable. The relief was financed through cuts in the development budget and savings from other heads, they added.

The government remains committed to ensuring that fluctuations in the international oil market are not fully passed on to consumers, and that every possible measure is taken to protect the public from inflationary pressure, sources said.

A senior government official, speaking on condition of anonymity, said global oil prices have seen a significant surge due to the Iran war, increasing pressure on domestic petroleum rates.

“The Prime Minister’s directive is clear, explore all administrative and fiscal options to prevent the direct impact of this global market shock from reaching the public,” the official said.

He added that the Finance Division has been tasked with discussing a detailed proposal with the IMF on possible restructuring of the levy.

Sources said the government is currently reviewing various options to avoid transferring the burden of rising international oil prices onto Pakistani consumers.