Budget 2026-27: Govt mulls doubling climate levy on petrol, …..

Admin.CEO 12 June, 2026News & Updates, Pakistan News

Budget 2026-27: Govt mulls doubling climate levy on petrol, diesel

ISLAMABAD – Pakistani consumers may brace for another fuel price shock in the coming weeks as the federal government is considering doubling the climate support levy on petrol and high-speed diesel in Budget 2026-27.

Amid already rising transport and energy costs in the South Asian country, authorities are mulling plans to increase the climate support levy by an additional Rs 2.5 per litre. If approved, the levy on both petrol and high-speed diesel will increase from the current Rs 2.5 per liter to Rs 5 per litre.

The proposed increase comes as the government continues efforts to meet fiscal and climate commitments made under its program with the International Monetary Fund (IMF). The Climate Support Levy was introduced for the first time this fiscal year as part of a broader strategy to generate revenue while supporting environmental and climate-related initiatives.

As of now, Pakistanis pay Rs 2.5 per liter on both petrol and high-speed diesel under the levy. The proposed revision will effectively double this amount, adding another layer of taxation to fuel products that are already subject to multiple duties and taxes.

While the government has yet to make a final decision, approval of the proposal could have far-reaching effects beyond fuel stations. Higher fuel prices generally translate into increased transportation costs, which put upward pressure on the prices of goods, logistics and public transport services.

The development comes at a time when households and businesses are already struggling with higher living costs, making any increase in petroleum-related taxes particularly significant.

Budget documents and final tax measures are expected to clarify whether the proposed hike forms part of the government’s fiscal roadmap for 2026-27. If implemented, the move would mark another step in efforts to harmonize Pakistan’s income-based policies and potentially increase the financial burden on consumers.