Govt raises HOBC levy to Rs300 per litre targeting luxury vehicles

The federal government, in the direction of Prime Minister Shehbaz Sharif, has decided to increase the levy on high octane blending component (HOBC) by Rs200 per litre, from Rs100 to Rs300, targeting fuel used in luxury vehicles to shift the financial burden onto the country’s wealthiest segment.

The decision was taken during a video-link meeting chaired by the prime minister, where it was noted that high-octane fuel, primarily consumed by high-end vehicles, should carry a higher levy in order to reduce pressure on the national economy and ensure a greater contribution from affluent consumers.

Under the decision, the levy on HOBC used in luxury vehicles will now stand at Rs300 per litre, effectively tripling the existing rate. The government expects to generate around Rs9 billion in monthly savings through this measure, which, according to the prime minister’s directions, will be utilised to provide relief to the general public.

The Prime Minister’s Office, in a statement, emphasised that the increase is limited to high-octane fuel and does not apply to petrol or diesel used in ordinary vehicles, ensuring that lower- and middle-income groups remain unaffected. The government also clarified that the decision will have no impact on public transport fares or air travel costs.

The move follows the prime minister’s earlier notice of high-octane pricing, after which the relevant ministry was directed to formulate a policy response. The latest decision reflects the government’s broader approach of redistributing the economic burden toward those with greater financial capacity while shielding the wider population from additional cost pressures.

The meeting was attended by key cabinet members, including Law Minister Azam Nazeer Tarar, Finance Minister Muhammad Aurangzeb, Information Minister Attaullah Tarar, and Petroleum Minister Ali Pervaiz Malik, along with senior officials.