ISLAMABAD: Pakistan has shared its five-year projections for petroleum development levy collections with the International Monetary Fund, outlining a steady increase in revenue from fuel-related taxes alongside plans to expand climate-focused levies. According to a report citing official sources, the government has also informed the IMF that the climate support levy will rise by Rs2.5 per litre starting July 1, 2026.
The submitted documents include detailed year-on-year estimates of petroleum levy collections, reflecting the government’s strategy to strengthen fiscal revenues under its ongoing IMF programme. For the current fiscal year, petroleum development levy collections are projected at Rs1,468 billion. In the next fiscal year, the figure is expected to increase to Rs1,638 billion, highlighting a continued upward trend.
Looking further ahead, the projections show collections of Rs1,787 billion for the fiscal year 2027-28, Rs1,989 billion for 2028-29, and Rs2,212 billion for 2029-30. These estimates indicate a long-term reliance on petroleum levies as a major source of government revenue amid efforts to stabilize the economy and meet IMF-agreed fiscal targets.
The IMF documents also provide historical data for comparison. Petroleum levy collections stood at Rs1,220 billion in the previous fiscal year, while collections were recorded at Rs1,019 billion in 2023-24 and significantly lower at Rs580 billion in 2022-23. The sharp rise over recent years underscores the government’s increased dependence on fuel taxes to bridge revenue gaps.
According to the report, the current petroleum levy on petrol stands at Rs79.62 per litre, while high-speed diesel is subject to a levy of Rs75.41 per litre. In addition to these charges, a separate climate support levy of Rs2.5 per litre is currently applied to both petrol and diesel. This levy is aimed at supporting climate-related initiatives and environmental resilience, in line with commitments made under international financing arrangements.
Officials say the projected increase in climate support levy from July 2026 reflects Pakistan’s broader plan to align fiscal policy with climate goals, while continuing to secure much-needed funding under IMF-supported programmes.
Meanwhile, the government has also announced adjustments to petroleum prices in its most recent fortnightly review. According to an official notification, petrol prices have been kept unchanged at Rs263.45 per litre. However, the price of high-speed diesel has been reduced by Rs14 per litre, bringing it down to Rs265.65 per litre. The reduction is expected to provide some relief to transporters and sectors reliant on diesel, including agriculture and logistics.
These developments come at a time when Pakistan is balancing public pressure over fuel prices with the need to meet revenue targets and IMF conditions. Analysts believe that while petroleum levies will continue to play a critical role in government finances, managing inflationary impact and public sentiment will remain a key challenge in the months ahead.
