Govt Aims to Collect Rs. 1.6 Trillion From Petroleum Levy in FY27

The Pakistani federal government aims to collect Rs. 1.676 trillion from the petroleum levy in the fiscal year 2027 (FY27), a target determined by an average levy of Rs. 80 per liter on petrol and High Speed Diesel (HSD). Energy Minister Ali Pervaiz Malik informed the National Assembly in a written response that the levy, previously reduced during periods of international oil market volatility to alleviate consumer hardship, is currently being restored in stages according to the enacted budgetary goals.

The levy on petrol and HSD experienced multiple adjustments following the onset of FY27, with the levy on petrol and HSD standing at Rs. 66.64 and Rs. 79.54 per liter on July 1, respectively. These rates were subsequently adjusted to Rs. 64.14 and Rs. 77.04 per liter on July 2, before being revised to Rs. 70.36 and Rs. 70.82 per liter on July 4.

The petrol levy attained the budgeted threshold of Rs. 80 per liter on July 11, while the HSD levy was incrementally increased throughout August. By August 20, both the petrol and HSD levies had risen to Rs. 80 per liter. Overall, the levy on petrol increased by Rs. 13.36 per liter from July 1 to August 20. The minister clarified that the Petroleum Division had not independently evaluated the levy's impact on distinct consumer groups.

He clarified that petroleum levy collection targets are incorporated into the approved federal budget and are contingent upon fiscal obligations undertaken with international financial institutions. When asked about lowering the levy to offer relief to consumers, Malik stated that such a reduction would hinge on available fiscal reserves, commitments to international financial institutions, revenue prerequisites, and global oil market conditions.

He further noted that the government shares the benefits of declining international oil prices with consumers whenever feasible, indicating that any prospective reduction in domestic fuel prices would depend on worldwide oil prices and the government's fiscal status.