Government admits Rs. 80 petrol levy

Federal Petroleum Minister Ali Pervaiz Malik has acknowledged that the government is collecting nearly Rs. 80 per litre in petroleum levy on petrol and around Rs. 70 per litre on diesel

Federal Petroleum Minister Ali Pervaiz Malik has acknowledged that the government is collecting nearly Rs. 80 per litre in petroleum levy on petrol and around Rs. 70 per litre on diesel. He stated that eliminating the levy would require an alternative source of revenue, as the funds are used to support government expenditures.

Speaking during a meeting of the National Assembly’s Standing Committee on Petroleum, chaired by Mustafa Mahmood, the minister explained that Pakistan imports nearly 70% of its petrol requirements. He added that despite a decline in global crude oil prices, refined petroleum products remain expensive in international markets.

According to the minister, lower crude oil prices do not automatically lead to cheaper petrol because fuel prices are determined through a transparent pricing mechanism regulated by OGRA and linked to the international Platts benchmark.

Ali Pervaiz Malik also highlighted that insurance and freight costs increased significantly during recent regional conflicts, putting additional pressure on fuel prices. Despite these challenges, he said Pakistan successfully maintained uninterrupted fuel supplies throughout the crisis. He added that petroleum levy revenues are deposited into the federal treasury and that the government is considering making Platts pricing information publicly available to improve transparency.

The minister said the government is moving ahead with the deregulation of the petroleum sector, expecting increased competition from private companies to eventually reduce fuel prices. He confirmed that the Refinery Upgradation Policy has been submitted to the federal cabinet, with expanding Pakistan’s refining capacity remaining a key government priority.

On the gas sector, Ali Pervaiz Malik revealed that the government is preparing for the privatization of state-owned gas companies as part of broader reforms supported by the World Bank. He said the gas sector is being deregulated in phases to improve efficiency, attract private investment, and create a more competitive energy market.

The minister also stressed the need to strengthen Pakistan’s energy infrastructure by increasing oil storage capacity, improving port governance, introducing night navigation facilities, and upgrading infrastructure to accommodate larger cargo vessels. He said these measures are essential to ensuring the country’s long-term energy security and reducing risks associated with imported fuel supplies.