ISLAMABAD: Pakistani President Asif Ali Zardari ordered the reintroduction of a petroleum levy on Thursday, to make up for revenue lost when a court order forced the government to abandon a separate new carbon tax a day before.

Zardari’s move is the latest twist in a tussle over fuel taxes that has seen prices raised, cut, and then raised again over the course of just over a week.

It comes as Pakistani officials meet with an International Monetary Fund (IMF) mission in Istanbul to discuss the country’s performance under a $7.6 billion emergency IMF programme, secured in November.

The IMF has said that one of the important tasks of the government was to increase tax revenue.

The price of petrol has now been raised back up to 62.13 rupees (76 US cents) a litre, the price announced when the state Oil and Gas Regulatory Authority (OGRA) originally increased prices on July 1.

The Supreme Court’s order had forced the OGRA on Wednesday to slash fuel prices by 18.7 per cent from that level. The court said on Thursday that it would uphold Zardari’s reimposition of the original tax.

By reintroducing the ‘petroleum development levy’ with slight changes, the government has plugged a potentially big hole in its balance sheet after the Supreme Court on Tuesday ordered the suspension of a new carbon tax meant to replace the original development levy.

Asim Hussain, adviser to prime minister on petroleum, told reporters after the court hearing that the government needed revenues from petroleum products to cut the budget deficit of 722 billion rupees ($8.83 billion).

‘Our aim is to give relief to people, but how could the budget deficit be reduced? Your budget is already in deficit of 722 billion rupees and if another 122 billion rupees is added on then you’ll face another economic slowdown,’ Hussain said.

‘You need this money to boost your economy.’

The Supreme Court, in upholding the new levy, said the opposition lawmakers who had originally petitioned against the new carbon tax would have to file a new petition if they objected to the resumption of the petroleum development levy.

Lawyer Ikram Chaudhry, who represents the lawmakers, said he intended to do just that.

‘We believe it comes under ‘over and excessive’ taxation and if the government needs money, they should cut their expenditure rather than shifting the burden on people,’ said Chaudhry. — Reuters