ISLAMABAD: The federal government is poised to levy a Petroleum Levy (PL) of Rs77 per litre (Rs82,077 per metric ton) on furnace oil starting July 1, 2025, as part of amendments to the Petroleum Levy Ordinance, 1961, introduced through the Finance Act 2025-26.
This measure aligns with Pakistan’s commitments under the IMF’s Resilience and Sustainability Facility (RSF) programme. In addition to the PL, a Carbon Levy of Rs2.5 per litre (Rs2,665/MT) will also be imposed on furnace oil in FY2025-26, increasing to Rs5 per litre in FY2026-27.
The agreement with the IMF mandates phased implementation of a supplementary carbon levy of Rs5 per litre on petrol, diesel, and furnace oil over two years. For FY2025-26, Rs2.5 per litre will be charged on petrol and HSD, rising to Rs5 next year.
The Finance and Petroleum Divisions finalized the levy structure with the IMF, and the proposal is now with the Federal Cabinet for approval. Once enacted, the revised Petroleum Levy Ordinance will empower the government to notify the applicable PL rates.
Story by Mushtaq Ghumman
