ISLAMABAD: Planning Minister Ahsan Iqbal has ruled out an immediate reduction in petroleum levy rates despite pressure from Jamaat-e-Islami (JI), saying the government may consider a gradual reduction in the next federal budget, subject to available fiscal space and economic conditions.
Thank you for reading this post, don't forget to subscribe!Speaking to the media on Thursday, Iqbal said a committee had been formed to examine feasible proposals for a phased reduction in the petroleum levy. The committee will include Deputy Prime Minister Ishaq Dar, Planning Minister Ahsan Iqbal and Rana Sanaullah from the government, while Jamaat-e-Islami will nominate three representatives.
He said both sides would discuss possible measures with the shared objective of providing relief to the public without undermining the country’s economic stability.
The statement came amid JI’s ongoing protests against high petroleum levies, particularly as international oil prices remain elevated due to tensions in the Middle East. A JI delegation also met the prime minister earlier this week to discuss the issue.
Iqbal maintained that Pakistan’s fragile macroeconomic position could not afford a return to previous fiscal mistakes. He said rising international oil prices and geopolitical uncertainty required careful economic planning, warning that decisions taken for short-term public approval could create serious financial difficulties later.
The minister added that the government was making efforts to provide relief to low-income households within its limited financial resources. He also disclosed that approximately 12.7 million people had registered under a government relief scheme targeting lower-income segments.
Currently, petroleum products carry a levy of Rs80 per litre, a climate levy of Rs5 per litre and customs duty of Rs20.56 per litre, bringing the combined charges to nearly Rs106 per litre.
Petroleum Levy Collection Exceeds Targets
Separately, Petroleum Minister Ali Pervaiz Malik informed the National Assembly that the government collected approximately Rs4.4 trillion through the petroleum levy between fiscal years 2022-23 and 2025-26, exceeding its cumulative target of Rs4.2 trillion by Rs227 billion.
According to the written reply submitted to Parliament, provisional petroleum levy collection during the last fiscal year reached Rs1.567 trillion against a target of Rs1.468 trillion.
For the current fiscal year, the government has set a petroleum levy collection target of Rs1.676 trillion.
The Petroleum Minister said petroleum levy collection was also part of the fiscal targets agreed with the International Monetary Fund (IMF) under its Extended Fund Facility programme.
The report further noted that Ali Pervaiz had written to the Finance Minister in May, recommending that the annual petroleum levy target be reduced to Rs1 trillion and the levy rate lowered to Rs50 per litre in view of high international oil prices. However, the recommendation was not adopted.
Fuel Stocks Sufficient for Domestic Demand
Responding to a question from MNA Sharmila Faruqi regarding national fuel availability, the Petroleum Minister said the country’s oil supply chain was being continuously monitored by the Oil and Gas Regulatory Authority (OGRA), in coordination with refineries, oil marketing companies, the Petroleum Division and relevant government institutions.
For September 2026, petrol demand was projected at approximately 692,000 tonnes, against domestic refinery availability of 262,000 tonnes. Oil marketing companies had planned imports of around 511,000 tonnes to meet the expected requirement.
No high-speed diesel imports were planned for the month, owing to healthy opening stocks and anticipated domestic refinery supplies of approximately 555,000 tonnes.
As of September 22, petrol stocks stood at around 395,000 tonnes, with another 56,000 tonnes of cargo at berth and 55,000 tonnes at outer anchorage in Pakistani waters. This brought total available supplies to approximately 506,000 tonnes, sufficient for around 22 days at average daily sales of 22,500 tonnes.
High-speed diesel stocks stood at approximately 568,000 tonnes, equivalent to around 30 days of supply based on average daily consumption of 19,000 tonnes.
The minister said petrol and diesel consumption remained broadly in line with projections, with only marginal variations. Oil marketing companies had also been directed to monitor unusual sales at retail outlets to prevent hoarding, diversion and misuse and ensure uninterrupted supplies to genuine consumers.
Rs66.5bn in Payments Pending to Oil Marketing Companies
The Petroleum Minister also disclosed that Rs66.5 billion in Price Differential Claims (PDCs) payable to oil marketing companies remained outstanding.
He informed the National Assembly that Rs53.8 billion had been disbursed against total claims of Rs120.3 billion submitted by the companies.
The release of a further 25 per cent of the claims is subject to confirmation that the companies have submitted complete documentation. The claims are currently under review by OGRA and will be processed following verification.
The minister added that the remaining payments would be subject to audit and verification by an auditor appointed by OGRA, with the selection process already completed.
The government’s position reflects the challenge of balancing public demand for lower fuel prices against revenue commitments under the IMF programme, while maintaining adequate fuel stocks and meeting outstanding financial obligations to oil marketing companies.
Story by Shahbaz Rana
