Major Jolt for Consumers: Govt Hikes Petroleum Levies, Holds Fuel Prices Despite Global Drop
Pakistan plans to impose a Rs5 per liter carbon levy on petrol and diesel starting July 1
The federal government has announced a major shock for consumers by keeping the retail prices of petroleum products unchanged despite a significant decrease in global oil prices.
The price of petrol remains at Rs254.63 per liter, and high-speed diesel (HSD) is fixed at Rs258.64 per liter for the next 15 days starting April 16, 2025.
However, the government has simultaneously increased the petroleum levy on these products, effectively raising the tax burden on consumers.
The petroleum levy on petrol has been increased by Rs8.02 per liter, bringing the total levy to Rs78.02 per liter, while the levy on high-speed diesel has been raised by Rs7.01 per liter to Rs77.01 per liter.
Some reports indicate the levy on petrol has reached Rs78.72 per liter.
| Item | Price/Levy Before | New Levy/Price | Change |
|---|---|---|---|
| Petrol Price | Rs254.63/liter | Rs254.63/liter | No change |
| Petrol Levy | Rs70/liter | Rs78.02 – Rs78.72 | Increase by ~Rs8 |
| High-Speed Diesel Price | Rs258.64/liter | Rs258.64/liter | No change |
| High-Speed Diesel Levy | Rs70/liter | Rs77.01 | Increase by Rs7 |
| Kerosene Oil Levy | Not specified | Rs18.95/liter | Increased |
| Light Diesel Oil Levy | Not specified | Rs15.37/liter | Increased |
| Carbon Levy (from July 1) | Rs0 | Rs5/liter | New levy |
This increase in levies means that although international oil prices have fallen by around $5-6 per barrel recently, consumers will not see any relief at the pump. Without the hike in levies, petrol prices could have been cheaper by approximately Rs8 per liter and diesel by Rs7 per liter, but the government has chosen to retain current prices and increase levies instead.
Prime Minister Shehbaz Sharif justified this move by stating that the government will use the savings generated from the higher levies for infrastructure development projects, particularly upgrading the N-25 highway and other uplift initiatives in Balochistan and Sindh.
The government also amended the Petroleum Products (Petroleum Levy) Ordinance, 1961, to allow the levy increase, as the previous maximum levy was Rs70 per liter.
Additionally, as part of an agreement with the International Monetary Fund (IMF), Pakistan plans to impose a Rs5 per liter carbon levy on petrol and diesel starting July 1, 2025, as part of a $1.3 billion Resilience and Sustainability Facility.
