IMF urges Pakistan to impose Rs5 carbon levy on petrol, diesel from July 1
Business
The implementation is set to begin with the new budget
ISLAMABAD (Dunya News) – The International Monetary Fund (IMF) has called on the Government of Pakistan to introduce Rs5 per litre carbon levy on petrol and diesel starting July 1, as part of the upcoming federal budget.
According to sources in the Ministry of Finance, discussions have been held with the IMF regarding the imposition of a carbon levy on petroleum products amounting to Rs5 per litre by 2027.
The implementation is set to begin with the new budget, and the levy could be increased gradually over time.
Also Read: Policy-level talks with IMF begin
The carbon levy will remain in effect until the conclusion of the Resilience and Sustainability Facility (RSF) program, under which Pakistan seeks long-term economic and environmental reforms.
In addition, talks were held about increasing foreign exchange reserves to $17.68 billion in the next fiscal year. It is estimated that over $5 billion will be raised through commercial bank lending and bond issuance.
For the current fiscal year, the IMF has also placed a condition that the State Bank of Pakistan (SBP) must maintain reserves of at least $14 billion.
Further discussions between the IMF delegation and officials from the Ministry of Finance, Federal Board of Revenue (FBR), and the State Bank are scheduled to continue today (Tuesday).
