Sindh’s new 1.8% infrastructure cess on oil imports may push fuel prices higher by Rs 3 per litre, sparking economic concerns nationwide.
The Sindh government’s decision to impose a 1.8% infrastructure cess on oil imports has raised alarm among economists and transport associations, who warn of potential fuel price hikes of up to Rs 3 per litre across Pakistan.
The cess, announced earlier this week, aims to generate funds for infrastructure maintenance and development within Sindh. However, oil marketing companies say the added cost will likely be passed on to consumers, worsening inflation at a time when the rupee remains under pressure.
According to industry sources, Pakistan’s current account deficit has widened again, and any additional tax burden could further slow industrial output. Transport unions have already threatened protests if the increase is not withdrawn or adjusted.
The Petroleum Division is in talks with provincial authorities to reconsider the levy or develop a shared revenue mechanism that would not burden end-users. Sindh officials, however, argue that the cess is “necessary to maintain critical logistics infrastructure used by the oil industry.”
Economists suggest that such regional levies could complicate federal-provincial fiscal coordination. With global oil prices fluctuating, even minor tax changes can have cascading effects on transportation, manufacturing, and household budgets.
The federal government has yet to issue an official statement on whether it will intervene or offer a subsidy to offset the increase.