Pakistan court cuts new oil tax: BBC

Pakistan's Supreme Court has slashed a new carbon tax imposed on oil by the government, bringing down oil prices by more than 10%.

The court order is temporary, pending a decision on petitions opposing the tax and withdrawing of power subsidies.

If the order is upheld, the government will lose $1.52b in revenues during the fiscal year ending this June. The budget deficit will also widen.

The court order has renewed a debate on "judicial activism" in Pakistan.

The BBC's M Ilyas Khan in Islamabad says the debate is over the extent to which the judiciary can intervene in the affairs of the executive without undermining the latter's ability to perform its functions.

Shortfall

Tuesday's Supreme Court order slashing the tax was issued by a three-member bench of the court, headed by Chief Justice Iftikhar Mohammad Chaudhry.

The order came a day after it issued another temporary injunction preventing the government from withdrawing over 50 billion rupees ($625m) worth of subsidies on electricity.

Together, the two measures will create a revenue shortfall of nearly 200 billion rupees in the current budget.

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