LAHORE
The Pakistan Industrial and Traders Associations Front (PIAF) has welcomed the government’s decision to reduce the petroleum levy on petrol by Rs80 per litre, calling it a positive step toward easing the burden on industries and consumers.
However, PIAF Chairman and Lahore Chamber of Commerce and Industry (LCCI) President Faheemur Rehman Saigol emphasized that partial relief is not enough and urged the government to completely eliminate all petroleum levies and surcharges to bring petrol prices in line with regional benchmarks.
According to PIAF calculations, the current petrol price of Rs378 per litre could fall to Rs215 per litre if all petroleum levies were removed.
“This would make domestic petrol pricing closer to countries like India, Bangladesh, and Vietnam, where governments have absorbed global oil price fluctuations through subsidies or minimal taxation, protecting both industry and exports,” Saigol said.
He noted that Pakistan’s industries are facing an extraordinary cost burden due to the cumulative fuel price increase of nearly 70% in recent months, far exceeding regional adjustments, which have ranged between 2% and 10%. “Even after the Rs80 reduction, Pakistan’s effective tax on petrol remains significantly higher than in regional competitors,” he added.
PIAF Senior Vice Chairman Nasrullah Mughal highlighted the cascading impact of high petrol prices on the industrial and trade sectors. “Fuel is a critical input for manufacturing, logistics, and supply chains. Every increase inflates transportation costs, raw material prices, and ultimately product costs,” he said. “This is especially damaging for small and medium-sized enterprises, which operate on thin margins and limited financial buffers.”
PIAF Vice Chairman Tahir Manzoor Chaudhary emphasized that high fuel costs are eroding Pakistan’s export competitiveness. “Export-oriented industries, including textiles, garments, and manufacturing, are already struggling with rising electricity and gas tariffs. The current petrol pricing structure further increases production costs, forcing businesses to either raise prices for international buyers or reduce production, both of which harm market share,” he said.
The PIAF leadership also pointed out that regional competitors have managed to stabilize fuel prices to support their industries. India and Bangladesh have limited fuel hikes to under 10%, while Vietnam and China rely on subsidies and controlled adjustments. “These countries are effectively shielding their exporters, allowing them to maintain margins and attract international orders,” said Saigol. “Pakistan, by contrast, is passing the full burden onto businesses and consumers, risking job losses and declining industrial output.”
“Partial relief through an Rs80 levy cut is welcome, but it does not resolve the systemic issue,” Saigol said. “Complete removal of fuel taxes would stabilize industrial operations, protect jobs, and improve export competitiveness, while sending a positive signal to investors.”
