Pakistan to pass on full global oil price hike to consumers

Pakistan’s government will pass on the impact of rising international petroleum prices to local consumers as regional tensions escalate due to the ongoing Iran-Israel conflict, Finance Minister Muhammad Aurangzeb told the National Assembly’s Standing Committee on Finance and Revenue.

Responding to a question from committee Chairman Naveed Qamar, Aurangzeb stated, “We are going to be very decisive, and we are not going to wait for decisions to be made.” He confirmed that Prime Minister Shehbaz Sharif has formed a committee to monitor oil supply chains, strategic reserves, and price trends to ensure Pakistan is prepared for any external shocks.

Committee member and Opposition Leader Omar Ayub Khan warned that Iran’s role as the world’s sixth-largest oil producer means that any escalation, particularly a disruption of supply through the Strait of Hormuz, could have serious implications for Pakistan’s economy.

He cautioned that rising global oil prices could widen the current account and budget deficits and called on the government to proactively plan for external shocks by strengthening strategic reserves.

Finance Secretary Imdadullah Bosal assured the committee that while international prices would be passed on to consumers, the government would not increase the petroleum development levy (PDL). He said the government aims to collect PKR 1.486 trillion from the PDL in FY26, including a newly imposed carbon levy introduced in the budget.

Meanwhile, the committee also reviewed key budget proposals and tax enforcement measures.

FBR defends tax on e-commerce

Federal Board of Revenue (FBR) Chairman Rashid Langrial told lawmakers that banks will now be obligated to flag suspicious transactions to the tax authority. The FBR has requested access to Suspicious Transaction Reports (STRs) to identify high-net-worth individuals whose bank activity doesn’t match their reported incomes.

“If someone is earning PKR 10 million but making transactions worth PKR 100 million, we will issue a notice,” Langrial said, emphasizing the need for stronger enforcement to broaden the tax base.

He also defended a new withholding tax on e-commerce, expected to generate PKR 59 billion in additional revenue, calling it the only viable way to bring digital vendors into the tax net. “If we don’t tax them through this system, we won’t be able to at all,” he told lawmakers.

The member Inland Revenue Policy added that the tax will apply to both local and foreign sellers using Pakistani online platforms. A separate mechanism is being developed for taxing cross-border digital vendors. “If a foreign seller keeps goods in Pakistan, they will be taxed the same way,” he said.

However, lawmakers and business leaders pushed back on FBR’s proposal to post tax staff or security personnel inside industrial units. Businessman and committee member Iktiyar Baig said, “If police walk into my factory tomorrow, I will shut it down.”