Pakistan targets Rs1.998 trillion in oil and gas receipts for FY2026-27

The federal government has targeted Rs1.998 trillion in receipts from the oil and gas sector for fiscal year 2026-27, an increase of 11.6% over the revised collection estimate for the outgoing year, according to budget documents.

The FY27 target is also 5.8% higher than the original Rs1.888 trillion budgeted for FY26.

The Petroleum Development Levy will remain the largest source of oil and gas revenue, with the government aiming to collect Rs1.677 trillion next year.

The target is Rs178.509 billion, or 11.9%, higher than the revised FY26 estimate of Rs1.498 trillion. It is also 14.2% above the original FY26 budget target of Rs1.468 trillion.

The petroleum levy alone accounts for around 83.9% of the total oil and gas receipts projected for FY27.

Natural gas surcharge, royalties

The government expects to collect Rs70.814 billion through the Natural Gas Development Surcharge, up 12.4% from the revised FY26 estimate of Rs63 billion.

The target is also 43.2% higher than the Rs. 49.437 billion originally budgeted for the outgoing year.

Receipts from royalty on oil have been set at Rs45.504 billion, compared with the revised estimate of Rs40 billion for FY26.

Although the new target is 13.8% higher than the revised figure, it remains 34% below the original FY26 allocation of Rs69 billion.

Royalty on gas is expected to generate Rs95 billion, up 11.8% from the revised estimate of Rs85 billion. However, the target remains below the original FY26 budget estimate of Rs138 billion.

Crude oil-related levies

The government has projected Rs20.5 billion in receipts from the discount retained on local crude prices, compared with the revised FY26 estimate of Rs19.488 billion.

Revenue from the windfall levy on crude oil has been set at Rs17 billion, up from the revised Rs16.106 billion.

The Gas Infrastructure Development Cess is expected to yield Rs2.248 billion, compared with Rs2 billion in the revised FY26 estimates.

Receipts from the petroleum levy on liquefied petroleum gas are projected at Rs3.455 billion, marginally below the revised estimate of Rs3.463 billion.

The windfall levy on gas is expected to generate Rs1.127 billion, down 9% from the revised FY26 estimate of Rs1.239 billion.

Captive power levy

The government has budgeted Rs15.736 billion from the Off the Grid levy imposed on captive power plants. This is 12.4% higher than the revised FY26 estimate of Rs14 billion, but substantially lower than the Rs105 billion originally budgeted for the current fiscal year.

Climate support levy

The Climate Support Levy is projected to generate Rs50 billion in FY27, compared with a revised estimate of Rs48 billion for the outgoing year.

No amount had been included under this head in the original FY26 budget, indicating that the levy was incorporated later during the year.

The new target represents a 4.2% increase over the revised FY26 estimate.

Overall increase

Total oil and gas receipts are projected at Rs1.998 trillion for FY27, compared with the revised Rs1.790 trillion for FY26.

The increase is largely driven by the higher Petroleum Development Levy target, which accounts for most of the Rs207.597 billion year-on-year rise in projected receipts.