Sindh 1.85% Petroleum Cess May Trigger Fuel Shortages
Pakistan oil industry has raised serious concerns over the Sindh 1.85% Petroleum Cess May Trigger Fuel Shortages and government decision to impose a 1.85% Infrastructure Development Cess (SIDC) on petroleum imports, a move that experts warn could trigger fuel shortages and push up prices by up to Rs3 per litre across the country.
Industry Raises Red Flag Over New Levy
The Oil Marketing Association of Pakistan (OMAP) has issued a strongly worded letter to the Petroleum Division calling the proposed deduction unlawful, financially unsustainable, and destabilizing for the market.
OMAP cautioned that enforcing the SIDC without incorporating it into the Oil and Gas Regulatory Authority pricing structure would erode already thin profit margins of oil marketing companies (OMCs). This, in turn, could make it impossible to sustain regular fuel imports and distribution.
OMCs operate in a fully regulated environment where every cost is built into a defined pricing formula Sindh 1.85% Petroleum Cess May Trigger Fuel Shortages Adding 1.85% without adjustment simply breaks the model.
Potential Price Impact include Rs2.5 to Rs 3 Per Liter
Industry experts estimate that Sindh’s 1.85% Petroleum Cess May Trigger Fuel Shortages and 1.85% levy translates to an additional cost of Rs2.5 to Rs3 per liter. This extra burden, if not officially reflected in the consumer price include:
- Delay offloading of imported petroleum cargo,
- Cause congestion at Karachi ports,
- Reduce liquidity for importers.
- Eventually create supply shortages at retail fuel stations nationwide.
Petrol price in Pakistan Today
The Government has announced the following petroleum prices. The Current petrol price in Pakistan is Rs 263.02 per litre and Diesel price is Rs 275.41 per litre . The prices of petrol changed after every two weeks and remained constant for a fortnight. The Federal government and The Oil and Regulatory Gas Authority sets fuel prices today and in the future.
Official petroleum rates in Pakistan
| Fuel | Price |
| Petrol | Rs 263.02 |
| Diesel | Rs 275.41 |
Read also about : Kerosene Oil and Light Diesel Oil prices increase for next Two weeks
Legal & Regulatory Concerns
The OMAP letter argues that any levy imposed on petroleum products must be first approved by OGRA and built into the regulated price formula.Implementing the SIDC outside this structure, the letter warns, violates:
- The Petroleum Rules.
- The OGRA Ordinance.
- Established pricing principles.
OMCs say they cannot absorb additional costs, as current regulated margins already barely cover operational expenses like transportation, storage, and distribution.
Federal Provincial Tug of War
The SIDC is a concept that was introduced by Sindh under provincial law in the 1990s. However the federal government has long maintained that any such levy must first be factored into the regulated pricing system before being enforced.
The issue has remained a sensitive point between Islamabad and Karachi for years. Now, with global oil markets already volatile and Pakistan’s fiscal space under pressure, the timing of this enforcement has alarmed the entire energy sector.
Conclusion
Sindh 1.85% Petroleum Cess May Trigger Fuel Shortages has reignited the federal provincial debate over petroleum taxation in Pakistan. While Sindh frames as a development measure industry leaders view it is a potential disruptor to the already fragile fuel supply chain. Without a coordinated policy response the ultimate cost may fall on millions of Pakistani consumers through higher petrol and diesel prices and possible supply shortages.
FAQ’s
What is the full form of SIDC?
The Sindh Infrastructure Development Cess is a provincial levy imposed on imports entering Sindh province .The funds are meant to be used for infrastructure projects in Pakistan like roads and development initiatives.
How much is the new cess on petroleum imports ?
The Sindh government of Pakistan has announced a 1.85% levy on petroleum imports.
Why is the oil industry opposing this move by Pakistan?
OMCs say the levy is not part of the regulated price approved by Oil and Gas regulatory and authority (OGRA). If enforced without adjustments it will increase costs for the companies, leading to supply disruptions.
How will this rise in price affect consumers?
Fuel prices in Pakistan could rise by 2.5 per liter to Rupees 3 per liter and shortages may occur if importers delay or suspend deliveries.
How much Sindh 1.85% Petroleum Cess May Trigger Fuel Shortages?
Pakistan oil industry has raised serious concerns over the Sindh 1.85% Petroleum Cess May Trigger Fuel Shortages and government decision to impose a 1.85% Infrastructure Development Cess on petroleum imports.