Pakistan raises Climate Levy on fuel, keeps prices unchanged

Pakistan raises climate levy on fuel, keeps prices unchanged

The federal government has revised the tax structure on petrol and high-speed diesel from July 1 by increasing the Climate Support Levy while reducing the Petroleum Levy by the same amount. The adjustment ensures that fuel prices remain unchanged despite the changes in taxation.

According to notifications issued by the Petroleum Division, the government increased the Climate Support Levy on both petrol and diesel by Rs2.50 per litre, raising the levy from Rs2.50 to Rs5 per litre.

At the same time, authorities reduced the Petroleum Levy on both fuels by Rs2.50 per litre. Because the increase in one levy matches the decrease in the other, consumers will continue to pay the same retail prices for petrol and diesel.

The revised tax arrangement took effect on July 1 and reflects the government’s decision to shift part of the fuel taxation toward climate-related revenue without placing an additional financial burden on motorists. Officials stated that the change only modifies the composition of fuel levies and does not affect the overall price paid by consumers at fuel stations.

The notifications formalize the new levy structure and confirm that the existing petrol and diesel prices will remain in place under the revised taxation framework.