Pakistan sets Rs1.676 trillion Petroleum Levy target for FY2026

The federal government has set a target of Rs1.676 trillion in petroleum levy collections for the upcoming fiscal year FY2025-26 as part of its broader strategy to boost non-tax revenues, according to budget documents.

The government has projected total non-tax revenue at Rs5.335 trillion for the next fiscal year. Among the major revenue sources, the target for mobile handset levy collections has been fixed at Rs14 billion, while fee collections by the Islamabad administration are expected to generate Rs27.51 billion. Airport fees are projected to contribute Rs72 million.

The government expects to receive Rs130 million from the surplus of the Pakistan Telecommunication Authority (PTA), while revenues from 4G and 5G spectrum-related receipts are estimated at Rs27.68 billion. Regulatory authorities are projected to contribute Rs4.73 billion through surpluses and penalties.

The budget also includes a target of Rs100.8 billion in mark-up receipts from provinces and Rs170.85 billion from public sector entities and other sources. 

Dividend income has been projected at Rs130.38 billion. Receipts from civil administration and other government operations are estimated at Rs1.480 trillion, while grants from provinces are expected to amount to Rs1.035 trillion. 

Other miscellaneous receipts, including the Gas Development Surcharge (GDS), foreign grants, royalties on crude oil, windfall levies on crude oil, and the Gas Infrastructure Development Cess (GIDC), are projected to generate Rs2.343 trillion.

Collectively, these sources are expected to help the government achieve its non-tax revenue target of Rs5.335 trillion during FY2025-26.

Subsidies Reduced by Rs66 Billion, Allocations Set at Rs1.091 Trillion The federal government has allocated Rs1.091 trillion for subsidies in the upcoming fiscal year, reflecting a reduction of Rs66 billion compared to the current year's allocation.

According to budget estimates, the largest share of subsidies—Rs830 billion—will be directed toward the power sector, including support for WAPDA, PEPCO and K-Electric. This compares with Rs893 billion allocated for the sector in the outgoing fiscal year.

In the food sector, Rs19 billion has been earmarked for PASSCO. The industry and production sector will receive Rs37 billion in subsidies, including support for fertilizer production and supply initiatives.

The government has also allocated Rs8 billion for its electric vehicle promotion scheme. Subsidies worth Rs23.2 billion have been set aside to clear outstanding liabilities of the Utility Stores Corporation.

Additional allocations include Rs15 billion for wheat subsidies in Gilgit-Baltistan, Rs10 billion for the import of urea fertilizer, Rs5 billion for mark-up support under the Mera Pakistan Mera Ghar housing scheme, and Rs2 billion to facilitate lending to small and medium-sized enterprises (SMEs).

Furthermore, Rs5 billion has been allocated as a subsidy for metro bus operations.