Pakistan weighs tax relief, budget shifts over oil shock

Pakistan is considering a mix of fiscal and policy steps to soften the impact of any further rise in global oil prices on domestic consumers. Among the options under review are diverting part of the federal development budget to absorb higher import costs and seeking IMF flexibility on petroleum-related taxation, including the levy on fuel.

Officials fear that passing the full burden of any new oil spike to consumers would intensify inflation and further strain households. The proposed approach reflects a broader effort to protect the economy from external energy shocks while balancing fiscal limits and ongoing commitments with international lenders.