Pakistan has recently experienced multiple rounds of fuel price hikes, significantly impacting both consumers and businesses. The government has raised petroleum product prices three times in the last month, despite ongoing claims that the economy is stabilizing. While the global oil market shows signs of stabilization, the continued high tax burden on fuel prices remains a serious concern.

The price disparity between base fuel costs and retail prices is largely due to taxes. Petroleum levies and carbon taxes alone significantly raise the cost of petrol and diesel. For instance, the petroleum levy adds Rs 75.52 per litre on petrol and Rs 74.50 on diesel, which nearly doubles the price at the pump. While taxes are necessary for government revenue, they are contributing to rising inflation and increasing the cost of doing business in Pakistan, creating a vicious cycle that discourage new businesses from starting and stifle the growth of existing ones.

A striking example of this is the closure of around 200 textile mills and the winding up of multinational companies (MNCs) in the country. High taxes, along with operational costs, have forced many businesses to shut down, resulting in a direct loss of jobs, skills development, and opportunities for poverty alleviation, key areas where Pakistan’s economy needs urgent attention.

Instead of imposing more taxes on businesses, cutting down on the........

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