Petroleum Products Ordinance: Senate panel opposes amendments thru finance bill

ISLAMABAD: Senate Standing Committee on Finance Sunday expressed their reservations over the proposals to amend Petroleum Products (Petroleum Levy and Climate Support Levy) Ordinance, 1961 through the Finance Bill 2026.

During review of the Finance Bill 2026 on Sunday, Chairman of the committee Senator Saleem Mandviwala objected that the Petroleum Products (Petroleum Levy and Climate Support Levy) Ordinance, 1961 should not be passed as a money bill but should be presented as a normal bill.

The representative of the Law Division pointed out that the Petroleum Products (Petroleum Levy and Climate Support Levy) Ordinance, 1961 has been repeatedly amended in the past.

Senator Anusha Rahman joined the meeting through an online link and also objected that the Petroleum Products (Petroleum Levy and Climate Support Levy) Ordinance, 1961 should not be passed with the money bill.

Director General Oil informed the committee that the definitions of “company”, “Oil Marketing Company” and “refinery” have been specified in the law for inclusion of names in the list of licensed companies from the OGRA.

He explained that where any amount of the Petroleum Levy and Climate Support Levy are not paid within the prescribed due date; i.e., the date of filing of Sales Tax or Federal Excise Returns in case of local production and date of payment of custom duty in case of imported products, the defaulting company/refinery would, in addition to the amounts due, be liable to pay late payment surcharge.

Senator Sherry Rehman pointed out that the both the Petroleum Levy and Climate Support Levy are sales tax and non-progressive taxes. The Petroleum Levy and Climate Support Levy are not part of the divisible pool of the federal government. Even the Climate Support Levy is not Carbon Tax. The collections from these levies have not been spent on climate/ environment related issues, she said.

Both the Petroleum Levy and Climate Support Levy should be converted into sales tax and be made part of the divisible pool, she added.

Copyright Business Recorder, 2026