Pakistan’s petroleum levy collection jumps 45% in nine months, nears last fiscal year’s total

Pakistan’s petroleum levy collection rose 45% during the first nine months of fiscal year 2025-26, strengthening the country’s fiscal position as budget negotiations with the International Monetary Fund begin.

Official fiscal operations data shows petroleum levy collection reached ₨1.205 trillion during July-March FY26, an increase of ₨371 billion compared to the same period last year.

The amount is nearly equal to the total petroleum levy collected during the entire previous fiscal year. Consumers are currently paying ₨117.5 per litre in petroleum levy on petrol.

The Finance Ministry data showed the overall budget deficit during July-March remained at ₨856 billion, or 0.7% of GDP, supported by higher petroleum levy collection, lower interest payments and record provincial cash surpluses.

The primary budget surplus stood at ₨4.1 trillion, or 3.2% of GDP, during the first nine months of the fiscal year.

Interest payments declined by ₨1.5 trillion, or 23%, to ₨4.95 trillion following a sharp reduction in policy interest rates, while total federal expenditure fell 8% during the period.

The four provincial governments generated a combined cash surplus of ₨1.63 trillion, up ₨583 billion, or 55%, compared to last year. Punjab accounted for ₨824 billion of the total provincial surplus.

According to the IMF’s latest public projections, Pakistan’s fiscal performance is expected to remain stronger than pre-conflict estimates despite the impact of the Middle East war.

The IMF projects Pakistan’s budget deficit at 3.2% of GDP for the current fiscal year compared to the government’s original target of 3.9% of GDP set in the budget.

The fund also expects the primary surplus to remain at 2.5% of GDP this fiscal year, slightly above programme targets, although government officials said the figure remained unadjusted.