Govt slammed for increasing taxes on petrol products

KARACHI: Industrialists and businessmen have criticised the government for increasing taxes on petroleum products, urging it to pass on the relief from lower international oil prices to the domestic market to help contain inflation and reduce the high cost of doing business in the country.

Chairman of the Pakistan Hosiery Manufacturers and Exporters Association, Babar Khan, said that taxes on petroleum products in Pakistan are among the highest in the world. However, he added that the benefits of these taxes are not translated into development and welfare for the masses.Despite the fact that the public and business community continue to pay higher taxes, the government still complained about low tax revenues, even though corruption in the country is rampant and development remains extremely slow.

High taxes on petroleum products keep logistics costs elevated, while road infrastructure remains dilapidated, particularly in Karachi, he remarked.

On January 15, the government kept petroleum product prices unchanged despite a drop in international oil prices. Instead of passing on the benefits to the masses, it increased the levy on each litre of petroleum products.

Accordingly, the petroleum levy on diesel and petrol was jacked up by up to Rs 4.65 per litre for the second fortnight of January 2026, while the prices of these products were maintained at the existing level of Rs 253.17 per litre. High-speed diesel (HSD) will remain priced at Rs 257.08 per litre.

Former president of the Federal B Area Association of Trade and Industry (FBATI), Syed Raza Hussain, said that the government should pass on relief in petroleum product prices to the masses whenever international prices decline, just as it increases prices in line with global markets.

He emphasised that the government should realise that a high cost of doing business will never sustainably enhance the country’s exports, as regional and competing countries are more competitive than Pakistan.

“Our electricity costs are high, petroleum product prices are also high, and the policy rate is being maintained at elevated levels. These factors do not create a favorable environment for exporters and businessmen in the country,” he said.