Rising Global Oil Prices May Derail Pakistan’s Petroleum Levy Target
ISLAMABAD: Pakistan’s federal government is at risk of missing its Rs1.161 trillion petroleum levy (PL) collection target for the current fiscal year, as global oil prices continue to surge amid escalating tensions between Israel and Iran.
📈 Oil Prices Surge After Regional Conflict Escalates
Following Israel’s recent attacks on Iran, global crude prices spiked sharply:
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Petrol (Gasoline) jumped from $71.81 to $73.79 per barrel
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High-Speed Diesel (HSD) rose from $76.14 to $78.68 per barrel
As a result, local fuel prices in Pakistan may increase from June 16, 2025:
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Petrol could rise by Rs4.38 per litre
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HSD could go up by Rs5.02 per litre
🛢️ Updated Costs & Premiums
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Petrol cost increased from Rs137.02 to Rs141 per litre
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HSD rose from Rs140.92 to Rs145.58 per litre
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Premium on petrol climbed to $79.35 per barrel
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Customs duties on petrol and diesel have also edged higher
These projections exclude adjustments by Pakistan State Oil (PSO), which, if implemented, may lead to further price hikes.
💰 Challenges in Meeting Petroleum Levy Targets
For FY2024-25:
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Target: Rs1,161 billion
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Collected (July–March): Rs834 billion (71% of the revised target)
For FY2025-26, the target rises to Rs1.4 trillion, but market experts warn that high fuel prices may reduce consumption, impacting collection efforts.
⚖️ Levy Increases to Meet IMF Commitments
Since March 16, the government:
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Removed the Rs60 per litre cap on PL via ordinance
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Imposed additional PL of Rs18.02/litre on petrol and Rs17/litre on HSD
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Expected revenue from this move: Rs90 billion quarterly, Rs300 billion annually (based on current usage)
The Energy Ministry has also sought cabinet approval to align fuel levies with IMF requirements, supporting broader fiscal reforms.
⛽ Fuel Demand Remains Strong
Despite rising prices:
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Oil Marketing Companies (OMCs) reported a 10% year-on-year increase in sales for May 2025
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Sales rose to 1.53 million tons, marking a 5% month-on-month increase
📆 What’s Next?
The Oil and Gas Regulatory Authority (OGRA) will assess:
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International oil prices
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Exchange rates
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Market trends
This data will help determine fuel prices effective from June 16, 2025, with the Finance Division set to announce official prices on June 15.
