ISLAMABAD: The federal government collected a provisional Rs1.567 trillion through the Petroleum Levy during the previous fiscal year, while the revenue target for 2026-27 has been set at Rs1.676 trillion, according to a written response submitted to the National Assembly.

Minister for Energy (Petroleum Division) Ali Pervaiz Malik shared the details while responding to questions raised by MNA Dr Mirza Ikhtiar Baig regarding taxes and levies imposed on petroleum products.

According to the response, sales tax is currently not being charged on petrol and diesel. Instead, petroleum prices include the Petroleum Levy (PL), Climate Support Levy (CSL) and customs duty.

The Petroleum Levy is charged at a fixed rate per litre and falls outside the general sales tax framework. Its amount does not automatically increase with fluctuations in international oil prices.

Petroleum Levy Revenue and IMF Targets

The ministry's figures show that the provisional Petroleum Levy collection reached Rs1.567 trillion, compared with an earlier estimate of Rs1.468 trillion for the previous fiscal year.

For the ongoing fiscal year 2026-27, the government has set a collection target of Rs1.676 trillion.

The revenue generated through the levy is classified as federal non-tax revenue and deposited into the Federal Consolidated Fund. It contributes to government expenditure, including subsidies and relief measures.

The Petroleum Levy collection also forms part of the fiscal targets agreed upon with the International Monetary Fund (IMF) under its Extended Fund Facility.

Climate Support Levy Increased to Rs5 Per Litre

The Climate Support Levy was introduced through the Finance Act 2025. It was set at Rs2.50 per litre for the 2025-26 fiscal year.

According to the ministry's response, the levy was increased to Rs5 per litre from July 2, 2026.

The measure is intended to serve as a carbon-pricing mechanism aimed at discouraging fossil-fuel consumption and forms part of the broader climate-related fiscal reforms associated with the IMF's Resilience and Sustainability Facility.