In a move likely to hit the wallets of millions, the government of Pakistan has reportedly agreed with the International Monetary Fund (IMF) to increase the petroleum levy to Rs100 per litre, marking a new high in fuel taxation history.

The decision is part of the government’s broader strategy to meet its record tax collection target of Rs13 trillion for the fiscal year 2024–25.

Currently, the public is already paying Rs78.02 per litre in petroleum levy. With this new agreement, the burden on consumers is set to grow even heavier—especially if global oil prices continue to rise.

From Rs0 to Rs100: a rapid climb

Until 2021, petrol carried no levy at all. The government first introduced a modest Rs4 per litre levy in October 2021, which gradually escalated year after year. Since then, petroleum levy has become a major source of tax revenue.

According to official records:

• In FY2022–23, the government collected Rs580 billion through the levy.

• In FY2023–24, the collection surged to Rs1.019 trillion.

• For the current fiscal year, FY2024–25, the government has set an ambitious target of Rs1.117 trillion, which will further jump to Rs1.311 trillion in FY2025–26.

Already feeling the heat

From July 2024 to March 2025, the government has collected a whopping Rs833.84 billion in petroleum levy alone—highlighting just how heavily this indirect tax weighs on the public.

The planned increase not only aims to satisfy IMF benchmarks but also reflects the state’s increasing reliance on petroleum products as a key revenue stream. However, critics argue that such policies disproportionately affect the common citizen, especially at a time when inflation and unemployment are already high.