- The tax on petrol remains at Rs 105.37 per liter, that on diesel at Rs 55.24 per litre.
- The government will provide subsidies for petrol and diesel from March 14 to 20.
- Adjustments to oil levies are part of the IMF’s commitments.
ISLAMABAD: The federal government has decided to retain petroleum tax (PL) on petrol and diesel and issued a notification confirming the decision.
Petrol will continue to attract a levy of Rs 105.37 per litre, while high-speed diesel (HSD) will remain at Rs 55.24 per litre.
Existing prices will remain unchanged until further notice.
The move follows a 25% increase in PL from Rs 84.40 per liter to Rs 105.37 on March 1, 2026, after the US-Israel war against Iran. The maximum ex-depot price increased from Rs266.17 on March 1 to Rs321.17 per liter on March 7, with PL constituting 32% of the depot price.
For HSD, the PL was reduced from Rs76.21 to Rs55.24 per liter on March 7, while the ex-depot price increased to Rs335.86 per liter.
The government will provide a subsidy of Rs 23 billion to keep petrol and diesel prices stable from March 14 to 20. This includes Rs 49.63 per liter for petrol and Rs 75.05 per liter for diesel. The Oil and Gas Regulatory Authority (Ogra) will release the funds after verifying the claims submitted by the oil marketing companies.
The PL adjustments are part of the government’s commitment to the International Monetary Fund (IMF) to increase non-tax revenue. GST on gasoline remains at zero; if the standard GST of 18% were applied, the total tax burden would exceed 40%.
The government has set a PL revenue target of Rs 1,470 billion for the current fiscal year, compared to Rs 1,280 billion last year. Collections for the first six months (July-December) reached Rs 822 billion.
Meanwhile, the price of kerosene increased by Rs 39.20 per liter with Ogra setting the new rate at Rs 358.01 from Rs 318.81.
Prime Minister Shehbaz Sharif also approved a savings fund, with the Economic Coordination Committee of the Cabinet authorizing the transfer of Rs 27.1 billion.
