The federal and Sindh governments have decided to defer the deduction of the Sindh Infrastructure Development Cess (SIDC) on petroleum products until October 31, 2025, to prevent an imminent fuel crisis. The decision came after the Oil Marketing Companies Advisory Council (OCAC) and the Oil Market Advisory Council (OMAC) urged authorities to delay implementation, warning of potential supply disruptions nationwide. The move provides temporary relief to oil marketing companies and consumers amid concerns over rising fuel prices.
The Sindh government had earlier imposed a 1.8 percent infrastructure cess on petroleum imports, equivalent to Rs3 per litre on petrol, to be charged at the gate-out from ports. However, after industry pushback, authorities have directed oil marketing companies to deposit bank guarantees by October 31 instead of immediate payments. This step is intended to maintain uninterrupted supply while the government reassesses the policy’s economic impact on transport, agriculture, and industrial sectors.
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OCAC Secretary General Syed Nazir Abbas Zaidi, in a letter to Sindh Chief Minister Murad Ali Shah, cautioned that the additional cess would raise petroleum costs by over Rs3 per litre. Since fuel prices are federally regulated, this increase would ultimately burden the public and risk triggering inflationary pressure. He emphasized that the decision could also discourage imports, straining already fragile energy supply chains.
Meanwhile, the OCAC reported clearance delays at Karachi’s ports for several petrol and diesel shipments belonging to Pakistan State Oil (PSO), Hascol Petroleum, and Pakistan GasPort Limited (PGL). These hold-ups, linked to new bank guarantee requirements, have raised fears of a potential shortage in the coming weeks, especially during the ongoing agricultural season when fuel demand surges. Authorities are now working to ensure smooth clearance of all cargoes before the end of the month.
Experts believe the temporary deferral offers short-term stability, but long-term uncertainty persists if the cess is reimposed without structural reforms. They suggest that instead of frequent taxation adjustments, the government should focus on improving port efficiency and tax collection mechanisms to stabilize prices. For now, the postponement of the SIDC has averted a possible fuel crisis, ensuring consistent petroleum supply across Pakistan.