ISLAMABAD: The Federation of Pakistan Chambers of Commerce and Industry has called on the government to immediately suspend or provide relief on petroleum and carbon levies imposed on furnace oil, warning that escalating electricity costs are placing severe strain on industrial activity.
The demand comes at a time when Pakistan is facing reduced availability of Re-gasified Liquefied Natural Gas due to disruptions in imported gas supplies. This shortfall has forced the power sector to increase reliance on furnace oil-based generation to sustain electricity supply.
Under the Finance Act 2025, furnace oil is currently subject to a petroleum levy of Rs77 per litre (Rs82,077 per metric ton) and a carbon levy of Rs2.5 per litre (Rs2,665 per metric ton). Industry estimates indicate that, coupled with global furnace oil prices hovering around Rs400,000 per metric tonne, these levies are significantly inflating power generation costs.
According to FPCCI, the cumulative impact is adding approximately Rs2.5 to Rs3 per kilowatt-hour to electricity costs, pushing furnace oil-based tariffs to nearly Rs55–65 per unit. The additional burden is being transferred to consumers through Fuel Cost Adjustment, resulting in higher electricity bills for both households and industries.
In its appeal, FPCCI has urged the government to either temporarily suspend the levies or introduce an immediate relief mechanism to offset the cost burden during the ongoing RLNG supply crisis. The chamber emphasized that the situation qualifies as a force majeure energy disruption, warranting urgent fiscal flexibility to avoid industrial slowdown and potential export losses.
Energy experts note that the growing dependence on furnace oil highlights structural weaknesses in Pakistan’s energy mix, particularly its reliance on imported fuels, which exposes electricity pricing to global market volatility and domestic taxation policies.
While the government has yet to issue a formal response, discussions are reportedly underway as pressure mounts from industry stakeholders concerned about the impact of rising energy costs on economic stability and industrial output.
