Govt raises petroleum levy to Rs70/litre in Finance Bill

The federal government has amended the Finance Bill to increase the petroleum levy (PL) to Rs70 per litre on petrol, high-speed diesel (HSD), and high octane blending component (HOBC). 

This is an increase from the previous maximum limit of Rs60 per litre and is projected to generate Rs1,281 billion for the fiscal year 2024-25.

On Friday, the government passed an amendment to the Petroleum Products (Petroleum Levy) Ordinance, 1961 (XXV of 1961), specifically updating the Fifth Schedule.

This revised amount exceeds the International Monetary Fund’s (IMF) projection by Rs201 billion, as outlined in its second and final review under the Stand-By Arrangement (SBA) dated May 2024.

Additionally, the PL rate on other petroleum products, including light diesel oil (LDO) and kerosene oil, has been amended to Rs50 per litre each. 

The budgeted PL revenue for the next fiscal year represents a 47.4% increase from the Rs869 billion originally budgeted for the outgoing year.

Initially, the government proposed raising the PL to Rs80 per litre on petrol and HSD in the Finance Bill. Increases were also proposed for other petroleum products like HOBC, LDO, and E-10 gasoline, from Rs50 to Rs75 per litre. 

However, the PL rate for superior kerosene oil (SKO), widely used for cooking, remains at Rs50 per litre.