As Pakistan’s federal budget for the fiscal year 2025–26 awaits parliamentary approval, concerns are growing over a potential hike in motorcycle prices starting July 2025. Leading manufacturers such as Honda, Suzuki, and Yamaha may raise their prices in response to new fiscal measures aimed at boosting national revenue.
Federal Finance Minister Muhammad Aurangzeb unveiled the Rs17,573 billion federal budget earlier this week, with a strong focus on economic growth and deficit reduction. However, reports circulating on local media indicate that as part of the government’s revenue-generation strategy, two-wheeler prices may see an uptick in the coming fiscal year.
Impact on Motorcycle Buyers
Motorcycles remain a crucial mode of transport for millions across Pakistan. Popular models such as the Honda CD70, CG125, and Suzuki GS150 dominate the market due to their reliability and affordability. An increase in prices could place an additional financial burden on consumers, especially amid broader inflationary pressures.
Carbon Levy: A Key Contributor
A key component of the proposed budget is the introduction of a carbon levy on petroleum products, which could have a cascading effect on vehicle and transport-related costs. The levy includes:
-
Rs 2.5 per liter on petrol and diesel, expected to generate Rs 48 billion in FY2025–26.
-
An increase to Rs 5 per liter the following year, potentially generating Rs 96 billion in FY2026–27.
-
Rs 2 per liter (Rs 2,665 per metric ton) on furnace oil, also set to increase to Rs 5 per liter in the next fiscal cycle.
The federal government plans to amend the Petroleum Products (Petroleum Levy) Ordinance, 1961, to implement the carbon levy—framed both as a revenue-boosting tool and an environmental measure to curb fossil fuel dependence.
Industry Outlook
While no official announcement has been made by motorcycle manufacturers yet, industry analysts warn that higher fuel costs and increased taxes could lead to price adjustments in the auto sector, particularly for budget vehicles such as motorcycles.
