Budget 2024-25: How will increase in PDL affect Pakistanis?

Govt increases PDL on high-speed diesel oil and petrol by Rs20, reaching Rs80 per litre
A view of deserted petrol pump at Melody in Islamabad. — Online
A view of deserted petrol pump at Melody in Islamabad. — Online

Finance Minister Mohammad Aurangzeb on Wednesday tabled his first budget for the fiscal year 2024-25, announcing a significant increase in the petroleum development levy (PDL) on diesel and petrol, raising it to Rs80 per litre.

In his budget speech, Aurangzeb revealed the government's target to reduce the budget deficit to 6.9% of GDP. The Finance Bill 2025 outlined that the PDL on high-speed diesel oil and petrol has been increased by Rs20, reaching Rs80 per litre.

While the PDL on superior kerosene oil remains at Rs50, it has been raised on light diesel oil, high-octane blending component, and E-10 gasoline from Rs50 to Rs75. The PDL on LPG is unchanged at Rs30,000 per metric tonne.

The government aims to collect Rs1,281 billion through these levies.

Impact on the people

The hike in PDL is expected to raise fuel prices, increasing transportation costs and, consequently, the prices of essential goods and services. This will strain household budgets and potentially lead to higher inflation, impacting both consumers and businesses reliant on transportation.

While intended to address the fiscal deficit and secure IMF support, the immediate effect will be an increased financial burden on the population.