Pakistan Collects Record Rs1.57tr Petroleum Levy as Consumers Face Costly Fuel
ISLAMABAD, PAKISTAN — WEB DESK: Pakistan collected a record Rs1.567 trillion in petroleum levy during fiscal year 2025-26, as consumers faced elevated fuel costs and the government increasingly relied on petroleum products as a major source of non-tax revenue.
According to Ministry of Finance fiscal data, petroleum levy receipts increased by around 29% from Rs1.22 trillion in FY2024-25. The collection also surpassed the government’s original FY2025-26 target of approximately Rs1.468 trillion by nearly Rs99 billion.
The official FY2025-26 budget documents had set petroleum development levy receipts at Rs1.468 trillion, confirming the scale by which actual collections ultimately exceeded the initial target.
The increase illustrates the growing importance of petroleum levies to Pakistan’s public finances. Collections stood at around Rs580 billion in FY2022-23, increased to about Rs1.019 trillion in FY2023-24, reached Rs1.22 trillion in FY2024-25, and climbed to the record Rs1.567 trillion in FY2025-26.
Consumers also paid a separate Climate Support Levy. The Express report says Rs50.16 billion was collected under that levy during FY2025-26.
The record revenue came during a volatile period for Pakistan’s energy market, when international oil disruptions and geopolitical tensions pushed domestic fuel prices sharply higher at different points during the year. Finance Ministry data cited in reporting showed the petroleum levy helped strengthen federal revenues and contributed to improved fiscal indicators.
Pakistan ended FY2025-26 with an overall fiscal deficit equivalent to 2.6% of GDP, while the primary surplus reached a record 2.9% of GDP, supported by provincial cash surpluses, lower interest payments and strong revenue collection.
However, the heavier reliance on fuel levies has implications beyond government revenue. Because petroleum costs feed into transportation, freight and production expenses, elevated fuel prices can affect household budgets and business costs across the economy.
The revenue pressure is unlikely to disappear soon. The government has set a petroleum levy collection target of around Rs1.676 trillion for FY2026-27, higher than the previous year’s record collection.
The figures therefore underline a continuing fiscal challenge for policymakers: maintaining government revenues while limiting the impact of fuel-related charges on consumers and the wider economy.
