Govt Revises Petroleum Levy Amid Major Fuel Cut

The federal government has revised petroleum levy rates on key fuel products while implementing a substantial reduction in domestic petroleum prices effective June 20, 2026.

Under the revised structure, the petroleum levy on petrol has been reduced by Rs40.49 per litre, bringing it down from Rs106.74 per litre to Rs66.25 per litre. In contrast, the levy imposed on high-speed diesel (HSD) has been increased by Rs19.71 per litre, raising it from Rs53.26 per litre to Rs72.97 per litre.

The revised levy rates were notified by the Petroleum Division as part of its latest fortnightly review of petroleum product pricing.

Simultaneously, consumers have received significant relief through a sharp reduction in retail fuel prices. Petrol prices have been lowered by Rs74.28 per litre, decreasing from Rs373.78 per litre to Rs299.50 per litre. Similarly, the price of high-speed diesel has been reduced by Rs67.31 per litre, bringing the rate down from Rs378.78 per litre to Rs311.47 per litre.

Government officials indicated that the adjustment reflects both changing international market conditions and fiscal considerations relating to petroleum levy collections.

According to official data, petroleum levy revenues exceeded budgetary expectations during Fiscal Year 2025-26. The government collected approximately Rs1.49 trillion under the levy, surpassing the original annual target of Rs1.468 trillion.

The reduction in domestic fuel prices follows a notable decline in international crude oil markets. Arab Light crude, a benchmark relevant to Pakistan’s petroleum imports, recorded a decrease of approximately $16 per barrel within a single week, falling from $96 per barrel on June 11 to nearly $80 per barrel by June 18.

Market analysts note that although international crude prices have declined, Pakistan remains heavily dependent on imported refined petroleum products, which generally carry higher costs than crude oil and continue to influence domestic pricing mechanisms.

The latest adjustments are expected to provide relief to consumers, transport operators, businesses, and industrial sectors while maintaining revenue flows through the petroleum levy framework.