ISLAMABAD: The federal government has doubled the Climate Support Levy (CSL) on petrol and high-speed diesel (HSD) from Rs. 2.50 per litre to Rs. 5 per litre, effective July 1, 2026, under the Finance Act 2026 as part of Pakistan’s fiscal reforms and commitments under the International Monetary Fund (IMF) programme.
According to an official notification, the revised Climate Support Levy came into force on July 1. To prevent any immediate increase in fuel prices, the government simultaneously reduced the Petroleum Levy (PL) on both petroleum products.
The Petroleum Levy on petrol has been lowered from Rs. 66.66 per litre to Rs. 64.14 per litre, while the levy on high-speed diesel has been reduced from Rs. 79.97 per litre to Rs. 70.04 per litre.
The adjustment effectively restructures the taxation of petroleum products by replacing a portion of the Petroleum Levy with the Climate Support Levy, rather than imposing an additional financial burden on consumers.
Introduced through the Finance Act 2026, the Climate Support Levy is intended to generate dedicated funding for climate-related initiatives and support Pakistan’s environmental commitments. The measure also aligns the country’s fiscal framework with reform targets agreed under the IMF programme.
Despite the revised levy structure, retail prices of petrol and high-speed diesel remain unchanged, as the increase in the Climate Support Levy has been fully offset by the corresponding reduction in the Petroleum Levy.
