Govt keeps petrol, diesel levy unchanged; subsidy of Rs23bn approved
- Petrol levy remains Rs 105.37 per litre, diesel Rs 55.24 per litre.
- Govt to pay subsidy for petrol and diesel from Mar 14–20.
- Petroleum levy adjustments form part of IMF commitments.
ISLAMABAD: The federal government has decided to maintain the petroleum levy (PL) on petrol and diesel and issued a notification confirming the move.
Petrol will continue to carry a levy of Rs105.37 per litre, while high-speed diesel (HSD) will remain at Rs 55.24 per litre.
The existing prices will be kept unchanged until further notice.
The move follows a 25% hike in PL from Rs84.40 per litre to Rs105.37 on March 1, 2026, after the US-Israel war with Iran. The maximum ex-depot price rose from Rs266.17 on March 1 to Rs321.17 per litre on March 7, with the PL constituting 32% of the depot price.
For HSD, the PL was reduced from Rs76.21 to Rs55.24 per litre on March 7, while the ex-depot price increased to Rs335.86 per litre.
The government will pay a subsidy of Rs 23 billion to keep petrol and diesel prices steady from 14 to 20 March. This includes Rs49.63 per litre for petrol and Rs75.05 per litre for diesel. The Oil and Gas Regulatory Authority (Ogra) will release the funds after auditing claims submitted by oil marketing companies.
The PL adjustments are part of the government’s commitment to the International Monetary Fund (IMF) to boost non-tax revenue. GST on petrol remains at zero; if the standard 18% GST were applied, the total tax burden would exceed 40%.
The government has set a PL revenue target of Rs1.47 trillion for the current fiscal year, up from Rs1.28 trillion last year. Collections for the first six months (July–December) have reached Rs 822 billion.
Meanwhile, the price of kerosene oil has risen by Rs39.20 per litre, with Ogra fixing the new rate at Rs358.01, up from Rs318.81.
Prime Minister Shehbaz Sharif has also approved a thrift fund, with the Cabinet’s Economic Coordination Committee allowing Rs 27.1 billion to be transferred into it.
