Petroleum levy yields Rs220 billion in July and August

The federal government collected Rs220 billion through the petroleum levy in July and August, the first two months of fiscal year 2026-27, according to figures reported by Daily K2 and Minute Mirror. The annual target for the levy is Rs1.676 trillion.

The levy is charged at Rs80 per litre on both petrol and diesel. Parliament has empowered the federal government to change the rate without returning to the legislature for approval.

Daily K2 reported that the government is in discussions with Jamaat-e-Islami over proposals to reduce the burden on fuel consumers, and that the budget framework agreed with the International Monetary Fund under its $7 billion Extended Fund Facility leaves little fiscal space for cutting the levy at this stage. The outlet cited a report in The News. Daily K2 also reported that it is not yet clear how the government will answer the Jamaat-e-Islami demand.

The Rs1.676 trillion target is higher than the initial budget estimate of Rs1.468 trillion set for 2025-26. Collections that year reached Rs1.567 trillion by June 30, 2026, about Rs100 billion above the original estimate. The current budget plans to add a further Rs109 billion, taking receipts to Rs1.676 trillion by June 30, 2027.

Daily K2 reported that higher petrol and diesel prices have fed into inflation, with Consumer Price Index inflation close to double digits during the current fiscal year.

Two other fuel-related charges also produced revenue in July and August. The Climate Support Levy, also called the carbon levy, generated Rs27.5 billion, against a target of Rs50 billion for 2026-27 and collections of Rs50.159 billion in the previous year. The New Energy Vehicle Adoption Levy generated Rs7.225 billion, against a full-year target of Rs22.481 billion and a budgeted estimate of Rs10 billion last year.

Minute Mirror reported that the pace of collection over the remaining months will decide whether the annual levy target is met or exceeded.