Govt Announces 3 Career-Ending Punishments for Petroleum Levy Defaulters

The Pakistani government has proposed a new bill that could impose severe penalties on oil companies, refineries, and fuel licensees who fail to pay the petroleum levy or climate support levy. The Petroleum Products (Petroleum Levy and Climate Support Levy) (Amendment) Bill, 2026, recently introduced by Minister for Parliamentary Affairs Tariq Fazal Chaudhary, is set to be examined by the relevant standing committee.

The bill aims to ensure that the funds generated by these levies reach the government's coffers, especially as Pakistan is committed to collecting Rs. 1.6 trillion from the petroleum levy in fiscal year 2027.

Under the proposed legislation, every OGRA license will require payment of both levies before fuel leaves the refinery gates. Late payers will be subject to a surcharge of 1.5 times the six-month KIBOR or 12 percent per year, whichever is higher, charged daily until the outstanding amount is settled. The Office of Government Revenue Administration (OGRA) has the authority to suspend or cancel the license of a defaulter.

In cases where the full payment is not made, individuals could face up to three years in prison, a fine equivalent to the unpaid amount, or both. Moreover, directors and partners of defaulting companies may also be held responsible unless they can prove their knowledge and consent about the default.

The bill does not alter the rates of either levy, meaning it will not impact petrol and diesel prices. Instead, its purpose is to hold fuel companies accountable for remitting the levies to the government. The authorities will require companies to submit monthly levy statements and an annual audited certificate, with the audit costs borne by the company itself.

The government's aim is to collect the specified levies to meet its financial obligations under the International Monetary Fund (IMF) program, which recently reached a staff-level agreement pending Executive Board approval.