Pakistan has resisted the International Monetary Fund’s (IMF) proposal to impose a carbon levy on petroleum products, coal, and internal combustion engine vehicles. The IMF suggests increasing the existing petroleum levy from Rs60 to Rs70 per litre over three years, starting with an initial Rs3 per litre hike, to fund green energy initiatives.
Government officials have expressed concerns about the allocation of funds generated from this levy and potential jurisdictional issues between federal and provincial authorities, particularly regarding coal, which falls under provincial control. Additionally, the Federal Board of Revenue supports increasing federal excise duty rates on vehicles as part of the carbon levy strategy.
The IMF’s proposal is part of the Resilience and Sustainability Facility (RSF), aiming to support climate-vulnerable nations. Pakistan is seeking over $1 billion under this facility, with disbursements linked to actual climate-related spending.
