Pakistanis Paying Over Rs130 in Taxes and Margins on Every Liter of Petrol

ISLAMABAD: Consumers in Pakistan are facing a heavy financial burden from taxes, levies and company margins on petroleum products amid the ongoing economic crisis and rising inflation.

According to media reports and official data, there is a significant gap between the underlying cost of petroleum products and the prices paid by consumers.

Consumers are currently paying an additional Rs130.75 per litre on petrol and Rs122.47 per litre on high-speed diesel in the form of petroleum levy, various taxes and margins for oil marketing companies, distributors and dealers.

The basic import or production cost of high-speed diesel is reportedly Rs245.82 per litre, while its retail price has been fixed at Rs368.29 per litre. This means consumers are paying Rs122.47 above the underlying cost for every litre of diesel.

The additional charges include petroleum levy, sales tax and margins paid to distributors and dealers.

The high taxes and levies on petrol and diesel are also contributing to higher transportation, agricultural and food costs. In particular, increases in diesel prices directly raise freight charges and the cost of operating tractors and tube wells, adding to the prices of vegetables and other essential commodities.

The growing burden of petroleum-related taxes and charges is therefore putting further pressure on household budgets already strained by inflation.