Petroleum levy receipts: Govt sets Rs1.676trn target for FY27

ISLAMABAD: The federal government has set a target of Rs1.676 trillion in petroleum levy receipts for the fiscal year 2026-27, based on an average levy of Rs80 per litre on petrol and High-Speed Diesel (HSD), Minister for Energy (Petroleum Division) Ali Pervaiz Malik informed the National Assembly on Friday.

In a written response to the Lower House of the Parliament, the minister said the petroleum levy, which had been reduced during a period of exceptional volatility in international oil markets to provide relief to consumers, was being restored in phases in line with the approved budgetary target.

“The levy on petrol (MS) and HSD has undergone several revisions since the start of the current fiscal year.

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On July 1, the levy stood at Rs66.64 per litre on petrol and Rs79.54 on HSD. It was revised to Rs64.14 and Rs77.04, respectively, on July 2, before being increased to Rs70.36 on petrol and Rs70.82 on HSD on July 4,” the minister said.

He said that the levy on petrol reached the budgeted level of Rs80 per litre on July 11, while the levy on HSD remained at Rs70.82 per litre. “The government subsequently increased the HSD levy in phases, reaching Rs72.26 on August 6, Rs73.47 on August 7, Rs74.28 on August 8, Rs76.28 on August 12, Rs77.28 on August 13 and Rs78.28 on August 14. As of August 20, the petroleum levy on both petrol and HSD stood at Rs80 per litre,” he said. Overall, the levy on petrol increased by Rs13.36 per litre between July 1 and August 20.

The minister said no separate assessment had been carried out by the Petroleum Division to determine the impact of the levy on specific categories of consumers.

He explained that petroleum levy collection targets were part of the approved federal budget and were linked to fiscal commitments made with international financial institutions.

Responding to a question about reducing the levy to provide relief to consumers, Ali Pervaiz said the levy was a fiscal revenue measure determined within the approved budgetary framework and existing fiscal commitments.

“Any reduction is considered by the government subject to available fiscal space, commitments with international financial institutions, revenue requirements and international petroleum market conditions,” he said.

The minister, however, said the government passes on the benefit of declining international oil prices to consumers whenever possible, suggesting that any future reduction in domestic fuel prices would depend on international market conditions and the government’s fiscal position.

Copyright Business Recorder, 2026