Petrol prices are set to rise in September as the government assures the IMF of a PDL increase.

The government has assured the International Monetary Fund (IMF) that the petroleum levy will be increased to Rs50 per litre in a Letter of Intent (LoI) returned ahead of the Fund’s board meeting on August 29.

Pakistan returned its letter of intent after it was signed by Finance Minister Miftah Ismail and Governor State Bank of Pakistan Dr Murtaza Syed. They agreed in writing that the petroleum levy would be increased by Rs10 per litre in September (next month).

The government is also planning to present a mini-budget through the promulgation of an ordinance in order to bridge the fiscal gap created by the repeal of various tax breaks offered to powerful lobbies such as traders, bankers, and others.

Pakistan will be able to draw a $1.17 billion tranche from the Extended Fund Facility if the combined reviews are approved (EFF).

The government has also asked the IMF’s Board to increase the size of the EFF by $1 billion, raising it from $6 billion to $7 billion and extending its timeframe from September 2022 to June 2023. Pakistan would receive $4 billion from the ongoing EFF programme after receiving the next tranche of $1.17 billion.