Govt collects Rs220bn in petroleum levy in first two months of FY27
The federal government collected Rs220 billion through the petroleum levy in July and August of fiscal year 2026-27. It has set a full-year target of Rs1.676 trillion.
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- Petroleum levy collection reached Rs220 billion in the first two months of FY27.
- The annual target is Rs1.676 trillion, up Rs109 billion on last year's collection.
- The levy is currently Rs80 per litre on petrol and diesel.
The federal government collected Rs220 billion through the petroleum levy during the first two months of fiscal year 2026-27, according to reports by Geo News and other outlets.
For the full year, the government has set a collection target of Rs1.676 trillion by 30 June 2027. That is Rs109 billion more than it collected in the previous year.
The 2025-26 fiscal year ended on 30 June 2026 with collections of Rs1.567 trillion. The initial budget estimate had been Rs1.468 trillion, so actual collection was nearly Rs100 billion higher.
The government currently charges a levy of Rs80 per litre on both petrol and diesel. Parliament has empowered the federal government to adjust the levy and raise the rate without further parliamentary approval.
Other levies also brought in revenue. The Carbon Levy generated Rs27.5 billion in July and August, and the New Energy Vehicle Adoption Levy yielded Rs7.225 billion. The government has budgeted Rs22.481 billion from the NEV levy for this year, against Rs10 billion last year, and set a Climate Support Levy target of Rs50 billion, compared with Rs50.159 billion collected last year.
The government is holding talks with Jamaat-e-Islami on measures to reduce the petroleum levy. Geo reported that the budget framework agreed with the IMF under a $7 billion Extended Fund Facility leaves little fiscal space to cut the levy at this stage. It is unclear how the government will address the party's demand to rationalise the burden.
Express News reported that economists see the first two months' collection as progress toward the annual target, and that political parties are continuing protests against the levy across the country. Geo noted that higher fuel prices have contributed to inflation, which has stayed close to double digits this fiscal year.
Background
khabr.pk reported on 3 November that the government refused Jamaat-e-Islami's demand to end the petroleum levy, while agreeing to fuel cost relief for agriculture, public transport and certain vehicles. On 7 November we reported that the final round of talks was set for 10 November.
Why it matters for Pakistan
The levy is added to petrol and diesel prices, so the amount the government collects bears on what drivers and transporters pay at the pump. On 7 November petrol cost Rs346 per litre and high-speed diesel Rs378, according to khabr.pk's records. Of that, Rs80 per litre is the levy. Reports say higher fuel prices have fed into inflation close to double digits, which affects household budgets.
