ISLAMABAD: The government is set to gradually restore the petroleum levy (PL) on petrol and diesel to the budgeted Rs80 per litre, arguing that any prolonged reduction despite falling global oil prices would create a revenue shortfall, widen the fiscal deficit, and jeopardise fiscal stability.
This was confirmed by Adviser to the Finance Minister, Khurram Schehzad, here on Friday.
The advisor took to X, saying that the PL on diesel is still lower today than it was before the Gulf crisis. It was temporarily reduced to shield consumers from the sharp increase in international diesel prices over recent months, ensuring that the entire burden was not passed on to transporters, farmers, and other diesel users.
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He further said that it is a well-known fact that the revenue estimates for the current year, duly approved by the National Assembly, are based on an average PL rate of Rs80/liter on both Diesel and Petrol. Meeting these revenue targets is essential to finance budgeted expenditures and maintain fiscal stability.
The advisor said that as international oil prices ease, it is both prudent and fiscally responsible to gradually restore the levy toward its budgeted level rather than continue an emergency reduction indefinitely. A revenue shortfall would widen the fiscal deficit, ultimately imposing greater costs on the economy and the public.
The recent adjustments should therefore be viewed as a phased normalisation of a temporarily reduced levy—not as an arbitrary or unexpected tax increase, he added.
Copyright Business Recorder, 2026
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