The federal government has increased the Climate Support Levy on petrol from Rs2.50 to Rs5 per litre, effective July 1, fulfilling another condition set by the International Monetary Fund (IMF). At the same time, the petroleum levy on both petrol and high-speed diesel (HSD) has been reduced by Rs2.50 per litre each, according to a notification issued by the Petroleum Division on Wednesday night.
Details of the Levy Changes
The notification stated that the Climate Support Levy on petrol has been raised from Rs2.50 to Rs5 per litre, while a Climate Support Levy of Rs2.50 per litre has been imposed on HSD. The Climate Support Levy on diesel has also been increased from Rs2.50 to Rs5 per litre, the notification added. The Petroleum Levy on petrol and diesel has been cut by Rs2.50 per litre each.
Following the reduction, the Petroleum Levy on petrol has gone down to Rs64.14 per litre from the existing Rs66.64 per litre, while on HSD it has dropped to Rs77.04 per litre from Rs79.54 per litre. Current prices of petrol and diesel will remain unchanged till the next revision.
Revenue Targets and Collections
For the fiscal year 2025-26, the government had estimated a collection of Rs48 billion from the Climate Support Levy. During the first nine months of the previous fiscal year, from July 2025 to March 2026, the collection from the Climate Support Levy stood at Rs37.27 billion. Notably, the federal government had projected Rs5.336 trillion in non-tax revenue for FY 2026-27, up from Rs5.093 trillion during the ongoing fiscal year, with Rs1.727 trillion coming from petroleum and climate levies on petroleum products.
