The federal government has decided to double the Climate Support Levy on petrol and diesel to Rs5 per litre. However, it has offset this increase by reducing the Petroleum Levy by the same amount so that fuel prices for consumers remain unchanged.
The Petroleum Division issued notifications late Wednesday confirming that the revised levies came into effect on July 2.
Under the new notification, the Climate Support Levy on petrol and diesel has been increased by Rs2.50 per litre, raising it from Rs2.50 to Rs5 per litre.
The same increase has also been applied to the high-octane blending component (HOBC).
To offset this rise, the government has reduced the Petroleum Levy on petrol and high-speed diesel by Rs2.50 per litre.
The Petroleum Levy on HOBC has also been reduced by Rs2.50 per litre.
As a result, even though tax rates have changed, retail prices of petrol and diesel remain unchanged.
The Petroleum Division issued the notifications as part of the government’s updated fuel levy system, which took effect on July 1.
These changes come after the federal government kept petrol and diesel prices unchanged last week at Rs299.50 and Rs311.47 per litre, respectively.
On June 19, the government announced major relief by cutting petrol prices by Rs74 per litre and diesel by Rs67 per litre following a decline in global oil prices and easing tensions in the Middle East.
Prime Minister Shehbaz Sharif announced the cuts to pass on the benefit of lower international oil prices to consumers.
That relief followed a U.S.-Iran peace agreement, partly supported by Pakistan’s diplomatic efforts, and the reopening of the Strait of Hormuz, a key global energy route that helped improve supply and reduce crude oil prices.
Kerosene oil also dropped sharply at that time, falling by Rs48.29 per litre to Rs233.90.
Since then, the government has been adjusting the levy structure, while retail prices have mostly remained stable. The petroleum levy on diesel has increased from Rs72.97 to Rs79.54 per litre, while the levy on petrol has risen slightly from Rs66.25 to Rs66.64 per litre. The levy on kerosene has remained unchanged at Rs20.36 per litre.
