ISLAMABAD – Pakistani consumers could be bracing for another fuel price shock in the weeks to come as federal government considers doubling the Climate Support Levy on petrol and high-speed diesel in Budget 2026-27.
Amid already soaring transportation and energy costs across the South Asian nation, authorities are reviewing a plan to raise the Climate Support Levy by an additional Rs2.5 per litre. If approved, the levy on both petrol and high-speed diesel would increase from the current Rs2.5 per litre to Rs5 per litre.
The proposed increase comes as government continues efforts to meet fiscal and climate-related commitments made under its programme with the International Monetary Fund (IMF). The Climate Support Levy was first introduced during the current fiscal year as part of a broader strategy aimed at generating revenue while supporting environmental and climate-related initiatives.
As of now, Pakistanis pay Rs2.5 per litre on both petrol and high-speed diesel under the levy. The proposed revision would effectively double that amount, adding another layer of taxation to fuel products already subject to multiple duties and levies.
While the government has yet to make a final decision, approval of the proposal could have far-reaching implications beyond fuel stations. Higher fuel costs typically translate into increased transportation expenses, putting upward pressure on the prices of goods, logistics and public transport services.
The development comes at a time when households and businesses are already grappling with elevated living costs, making any increase in petroleum-related taxes particularly significant.
Budget documents and final taxation measures are expected to clarify whether the proposed increase becomes part of the government’s fiscal roadmap for 2026-27. If implemented, the move would mark another step in Pakistan’s efforts to align revenue generation with climate-focused policies while potentially adding to the financial burden on consumers.
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