Understanding the Basics
What Is the Petroleum Levy in Pakistan?
The Petroleum Levy (PL) is a fixed per-litre tax imposed by the federal government of Pakistan on petroleum products including petrol (Motor Spirit/MS), high-speed diesel (HSD), kerosene oil, light diesel oil (LDO), and liquefied petroleum gas (LPG). It is governed under the Petroleum Products (Petroleum Levy) Ordinance, 1961.
Unlike the General Sales Tax (GST), the petroleum levy is non-divisible revenue — meaning it does not have to be shared with provincial governments under the National Finance Commission (NFC) Award. This makes it a particularly attractive revenue tool for the federal government.
OGRA (Oil & Gas Regulatory Authority) recommends fuel prices, but the final retail price — including the levy — is notified by the Ministry of Energy (Petroleum Division) every fortnight (twice a month).
⚖️ How It's Different from Sales Tax
Sales tax (GST) goes into the Federal Divisible Pool and is shared with provinces per the NFC Award. Petroleum levy is 100% retained by the federal government, making it the preferred revenue tool under IMF fiscal programmes. Petrol and diesel are currently exempt from GST, so the entire consumer tax burden falls on the levy.
🏛️ Who Sets the Petroleum Levy Rate?
The Prime Minister's Office in consultation with the Ministry of Finance and the Petroleum Division sets the actual levy per litre. Parliament sets the legal maximum ceiling through the Finance Bill. The ceiling was raised from Rs 30 → Rs 50 (2022 Finance Act), then to Rs 70 (2024 Finance Act), and in practice has been charged well above Rs 100 through executive orders in FY2025-26.
As of May 9, 2026
Current Petroleum Levy Rates on All Fuels
Latest Update — May 9, 2026
The government raised the petroleum levy on petrol by Rs 13.91/litre to Rs 117.41/litre effective midnight May 9, 2026. The same increase was applied to high-speed diesel, raising it to Rs 42.60/litre. Petrol now costs Rs 414.78/litre and HSD Rs 414.58/litre.
| Fuel Product | Levy (May 9, 2026) | Retail Price | Levy % of Price | Change |
|---|---|---|---|---|
| Petrol (MS-92) | Rs 117.41/L | Rs 414.78/L | 28.3% | ↑ +Rs 13.91 |
| High-Speed Diesel (HSD) | Rs 42.60/L | Rs 414.58/L | 10.3% | ↑ +Rs 13.91 |
| Kerosene Oil | Rs 20.40/L | Rs 467.48/L | 4.4% | — |
| Light Diesel Oil (LDO) | Rs 15.80/L | Rs 369.72/L | 4.3% | — |
| LPG (Domestic) | Rs 4,669/tonne | Rs 304.12/kg | ~1.5% | — |
| Hi-Octane (HOBC) | Up to Rs 75/L | ~Rs 610/L | ~12% | Not regulated by OGRA |
Sources: Petroleum Division notification, Daily Pakistan (May 9, 2026), Express Tribune (April 24, 2026), PakWheels, OGRA data.
Where Your Money Goes
Price Breakdown: Every Rupee You Pay at the Pump
When you fill up your tank at Rs 414.78 per litre, here's exactly what each component costs — based on official OGRA data for petrol (MS-92) as of May 9, 2026:
⛽ Petrol (MS-92) — Rs 414.78/Litre
Ex-Refinery / Import Cost
~Rs 233/L
🔴 Petroleum Levy
Rs 117.41/L
Customs Duty
Rs 24.00/L
Climate Support Levy
Rs 2.50/L
OMC Margin + Dealer Commission
~Rs 16/L
Total Retail Price
Rs 414.78/L
🚛 Diesel (HSD) — Rs 414.58/Litre
Ex-Refinery / Import Cost
~Rs 340/L
🔴 Petroleum Levy
Rs 42.60/L
Customs Duty
Rs 33.00/L
Climate Support Levy
Rs 2.50/L
Freight Margin (IFEM)
Rs 7.75/L
Total Retail Price
Rs 414.58/L
Key Insight: Petrol bears a far heavier levy burden than diesel
Petrol consumers pay Rs 117.41/litre in petroleum levy alone — nearly 3× more than diesel (Rs 42.60). Total taxes on petrol amount to approximately Rs 144/litre (including levy, customs duty, and climate levy). The government has intentionally shifted the levy burden to petrol to reduce inflationary pressure on freight and agriculture — both of which are diesel-dependent.
2020 to 2026
Petroleum Levy History: Complete Timeline
The petroleum levy has risen dramatically over six years, driven by IMF programme conditions, fiscal deficit pressures, and rupee depreciation. Here is the verified, milestone-by-milestone account:
FY 2020–2021 · COVID Era
Levy Held Low — Global Oil Crash
Global crude prices collapsed during the COVID-19 pandemic. Pakistan's petrol price fell by approximately Rs 5.82/litre in 2020. The government maintained a relatively low petroleum levy as international prices provided breathing room. Petrol prices hovered between Rs 90–115/litre during this period.
Levy: ~Rs 10–20/litre
2022 · The First Major Shock
Subsidy Removal & Rs 50/L Levy Cap Set
The Russia-Ukraine war pushed global oil to over $120/barrel. After months of costly subsidies under PM Imran Khan, the government of PM Shehbaz Sharif removed all fuel subsidies in June 2022 under IMF pressure. Petrol surged by a record Rs 102.91/litre in a single year. The Finance Act 2022 raised the legal maximum petroleum levy ceiling from Rs 30 to Rs 50/litre.
Levy cap raised: Rs 30 → Rs 50/litre
July 2023 · IMF Bailout
Levy Committed to Rs 60/L Maximum
Pakistan signed a $3 billion IMF Stand-By Arrangement in July 2023. Under the conditions, the government committed to increasing the petroleum levy to a maximum of Rs 60/litre. Petrol peaked at a then-historic Rs 331.38/litre in September 2023 — the highest price ever recorded up to that point. Inflation hit 27.4% in August 2023, partly driven by fuel costs.
Levy on petrol: Rs 60/litre
Budget 2024–25 (June 2024)
Maximum Levy Ceiling Raised to Rs 70/Litre
The Finance Bill 2024 — linked to Pakistan's $7 billion Extended Fund Facility (EFF) approved in September 2024 — raised the legal maximum petroleum levy ceiling from Rs 50 to Rs 70/litre. Government set an ambitious target of Rs 1,281 billion from petroleum levy for FY2024-25, up from Rs 960 billion. In practice, the actual levy on petrol and HSD was held at Rs 60/litre until March 2025.
Ceiling: Rs 70/litre · Actual: Rs 60/litre
March 16, 2025
First Hike to Rs 70/Litre on Petrol & HSD
After holding the levy at Rs 60/litre since the IMF programme began, the government raised the levy by Rs 10/litre on both petrol and high-speed diesel. Both products now had a petroleum levy of Rs 70/litre — reaching the legal ceiling set in Finance Act 2024.
Petrol levy: Rs 70/L · HSD levy: Rs 70/L
April 15, 2025
Further Hike to Rs 78/L on Petrol, Rs 77/L on HSD
Another fortnight, another increase. The government raised the petroleum levy on petrol by Rs 8.02/litre and on HSD by Rs 7.01/litre, pushing both beyond the Rs 70/litre legal maximum — through executive orders. Total petroleum levy collected in FY2024-25 reached Rs 1,220 billion, below the target but still a record.
Petrol: Rs 78.02/L · HSD: Rs 77.01/L
April 3, 2026 · The Crisis Peak
Levy Hit Rs 161/L — Petrol Reached Rs 459 (All-Time High)
The Iran-Israel-US conflict closed the Strait of Hormuz, sending Brent crude surging from ~$75 to over $130/barrel. In this environment, the government set the petroleum levy at a record Rs 161/litre, pushing petrol to Rs 459/litre — the highest price in Pakistan's history. Public outrage was immediate and severe. Within 24 hours, PM Shehbaz Sharif announced an emergency Rs 80/litre levy reduction on national television.
⚠️ Crisis Peak: Rs 161/L levy · Rs 459/L petrol
April 4–11, 2026
Emergency Levy Reduction — Petrol to Rs 378, Then Rs 366
PM cut the petroleum levy from Rs 161 to Rs 80/litre, bringing petrol down to Rs 378/litre effective April 5. On April 11, further relief was passed: petrol fell to Rs 366.58/litre and diesel to Rs 385.54/litre as global crude stabilised slightly.
Petrol levy cut to: Rs 80.61/L
April 24, 2026
Levy Raised Again to Rs 107.4/L — Petrol ↑ Rs 26.77
Just three weeks after the "emergency relief," the government raised the petroleum levy on petrol from Rs 80.61 to Rs 107.38/litre, adding Rs 26.77/litre to the pump price. Petroleum levy collections had already reached Rs 1.2 trillion in the first nine months of FY2025-26, equivalent to 82% of the annual target of Rs 1.468 trillion. IMF had demanded an additional Rs 53/litre increase to be split across petrol and diesel.
Petrol levy: Rs 107.4/L · Total taxes: ~Rs 134/L
May 9, 2026 · Latest
Levy Raised to Rs 117.41/L on Petrol, Rs 42.60/L on HSD
The government hiked the petroleum levy on both petrol and high-speed diesel by Rs 13.91/litre each. Petrol levy reached Rs 117.41/litre while HSD levy was set at Rs 42.60/litre. Petrol is now priced at Rs 414.78/litre and HSD at Rs 414.58/litre. The freight margin on HSD was simultaneously reduced by Rs 9.38/litre (fixed at Rs 7.75/litre). Officials indicate further adjustments remain under consideration.
Petrol: Rs 117.41/L · HSD: Rs 42.60/L
Data Table
Year-by-Year Petroleum Levy on Petrol — Key Milestones
| Period | Levy on Petrol (Rs/L) | Legal Max Ceiling | Petrol Retail Price | Key Driver |
|---|---|---|---|---|
| 2020–21 | ~Rs 10–20 | Rs 30 | Rs 90–115 | COVID, low global oil |
| 2021–22 | ~Rs 20–30 | Rs 30 | Rs 115–200 | Russia-Ukraine war, subsidy removal |
| FY2022–23 | Rs 50 (raised) | Rs 50 (new ceiling) | Rs 214–331 | IMF conditions, PKR -40% |
| FY2023–24 | Rs 60 | Rs 60 (IMF cap) | Rs 250–270 | $3bn SBA bailout conditions |
| Jul–Mar FY2024-25 | Rs 60 | Rs 70 (Finance Act) | Rs 247–270 | EFF programme, held at Rs 60 |
| Mar–Jun 2025 | Rs 70 → Rs 78 | Rs 70 (statutory) | Rs 255–275 | IMF fiscal targets |
| Apr 3, 2026 (Peak) | Rs 161 ⚠️ | Exceeded via exec order | Rs 459 (all-time high) | Strait of Hormuz closure |
| Apr 5–11, 2026 | Rs 80.61 (cut) | — | Rs 366.58 | Public backlash, PM announcement |
| Apr 24, 2026 | Rs 107.38 | — | Rs 399.86 | IMF Rs 53/L additional demand |
| May 9, 2026 (Latest) | Rs 117.41 | — | Rs 414.78 | IMF fiscal compliance |
IMF & Fiscal Policy
The IMF's Role in Pakistan's Petroleum Levy
Pakistan's petroleum levy is no longer purely a domestic taxation decision — it is deeply intertwined with conditions set by the International Monetary Fund (IMF). Understanding this connection is essential to understanding why prices keep rising even when global crude falls.
Under Pakistan's $7 billion Extended Fund Facility (EFF), approved in September 2024, the government must reduce its fiscal deficit from 6.7% of GDP in FY2025 to 3.7% by FY2027 — a reduction of 3 percentage points in three years. Two-thirds of this fiscal consolidation was to be achieved through indirect taxes, of which the petroleum levy is the single most significant instrument.
EFF Programme Size
$7B
Extended Fund Facility, Sept 2024
Deficit Reduction Target
3% GDP
Over 3 years, FY25–FY27
FY26 PL Collection Target
Rs 1.47T
Highest ever annual target
FY26 PL Collected (9 months)
Rs 1.2T
82% of annual target by March 2026
🔒 Why the Levy Won't Come Down Easily
The IMF has asked Pakistan to charge approximately Rs 80/litre in petroleum levy on both petrol and diesel. With petrol already at Rs 117/L, the remaining demand is for higher HSD levy. Until Pakistan meets these targets, IMF disbursements — critical for foreign reserves — remain conditional. The government is also committed to raising the climate support levy from Rs 2.5 to Rs 5/litre from July 1, 2026.
❗ Why the IMF Prefers Petroleum Levy
The petroleum levy is easy to collect (at the refinery/import stage), has minimal evasion, is entirely retained by the federal government (no NFC sharing), and generates large, predictable revenue. The IMF's push to broaden the tax base — taxing agriculture, real estate, and the retail sector — has seen little progress, making fuel taxation the default instrument. This structural failure is what drives the disproportionate levy burden.
Consumer & Economic Effects
Impact of Petroleum Levy Hikes on Pakistan
Transport Fares
Every Rs 10/litre increase in diesel prices leads to higher freight and passenger transport costs, affecting every product that moves by road.
Food Prices
Food makes up ~40% of Pakistan's Consumer Price Index (CPI). Higher fuel costs for trucks and tractors push up prices of everything from wheat to vegetables.
Industrial Costs
Pakistan's large-scale manufacturing contracted 3.59% in FY2024. Higher furnace oil and diesel costs add to energy bills for factories already under pressure.
Household Budgets
For a driver filling a 40-litre tank, the April 24 levy increase alone meant Rs 1,071 extra per fill-up. Low-income families spend up to 50% of income on food and transport.
Regional Affordability
Pakistan's fuel affordability is now the worst among South Asian neighbors. An average Pakistani on ~$125/month income can afford only ~89 litres at current prices.
Inflation
Inflation averaged 5.25% (Jul 2024–Mar 2025), down from 27% — but levy hikes threaten to reverse this trend by raising structural transport and energy costs.
The Structural Problem: A Regressive Tax
The petroleum levy is a flat per-litre charge — it hits a poor motorcycle rider and a wealthy car owner at the same rate per litre. Since lower-income households spend a much larger share of their budget on fuel and fuel-dependent goods (food, transport), the levy is deeply regressive. IMF conditions to broaden the direct tax net — taxing real estate, agriculture, and undeclared income — have seen limited enforcement, leaving ordinary fuel consumers to bear the revenue burden disproportionately.
All Fuels Side-by-Side
Petroleum Levy on All Fuels — Comparison Table
This table shows how petroleum levy treatment varies significantly across fuel types in Pakistan:
| Fuel | Main Use | PL Rate (May 2026) | Sales Tax | Regulator | Consumer Profile |
|---|---|---|---|---|---|
| Petrol (MS-92) | Cars, motorcycles | Rs 117.41/L | Exempt | OGRA + PM | Urban middle class, individuals |
| High-Speed Diesel (HSD) | Trucks, buses, agriculture | Rs 42.60/L | Exempt | OGRA + PM | Transport, industry, farming |
| Kerosene Oil | Rural cooking, lamps | Rs 20.40/L | Exempt | OGRA | Rural, low-income households |
| Light Diesel Oil (LDO) | Small machinery, agriculture | Rs 15.80/L | Exempt | OGRA | Small industry, farming |
| LPG (Domestic) | Household cooking | Rs 4,669/tonne | 18% GST | OGRA | Households (gas substitute) |
| Hi-Octane (HOBC) | High-performance cars | Up to Rs 75/L | Variable | Not regulated | Affluent car owners |
| CNG | Rickshaws, taxis, vans | GIDC + Levy | Variable | OGRA + Gas DISCOs | Transport sector |
Why Diesel Levy Is Lower Than Petrol
Diesel (HSD) is the backbone of Pakistan's freight, agriculture, and public transport. A large increase in diesel levy directly triggers food inflation and transport strikes. The government has historically kept HSD levy lower than petrol levy to cushion these macro effects — and the IMF's demand for parity (Rs 80/L on both) has been partially resisted by shifting more levy onto petrol first.
Common Questions Answered
Frequently Asked Questions
Everything Pakistani consumers and businesses need to know about how the petroleum levy works and why it keeps changing.
What is the current petroleum levy on petrol in Pakistan (May 2026)?
As of May 9, 2026, the petroleum levy on petrol (MS-92) is Rs 117.41 per litre, following an increase of Rs 13.91/litre in the latest fortnightly revision. This is on top of Rs 24/litre customs duty and Rs 2.50/litre climate support levy, bringing total taxes on petrol to approximately Rs 144/litre. Petrol retail price is currently Rs 414.78/litre.
Why does the petroleum levy keep increasing in Pakistan?
The primary driver is Pakistan's fiscal obligations under IMF programmes. The $7 billion Extended Fund Facility (EFF) requires Pakistan to reduce its fiscal deficit, and petroleum levy — being entirely retained by the federal government (not shared with provinces) and easy to collect — is the government's default revenue tool. Pakistan's interest-to-revenue ratio is among the highest globally, and with limited success in taxing wealthy sectors like real estate and agriculture, fuel consumers bear the burden.
What is the difference between petroleum levy and sales tax on fuel?
The petroleum levy is a fixed per-litre charge that goes 100% to the federal government and is not shared with provinces under the NFC Award. Sales tax (GST) would be shared with provinces via the Federal Divisible Pool. Currently, petrol and diesel are exempt from GST (since Finance Act 2024), meaning all consumer tax burden comes through the levy. There has been IMF-backed discussion about imposing 3–5% GST on petrol and diesel, but this has not been implemented yet.
What was the highest-ever petroleum levy in Pakistan?
The highest petroleum levy in Pakistan's history was Rs 161/litre on petrol, set on April 3, 2026 amid the Strait of Hormuz crisis caused by the Iran-Israel-US conflict. This pushed petrol prices to Rs 459/litre — the all-time record. Within 24 hours, Prime Minister Shehbaz Sharif announced a Rs 80/litre reduction, cutting the levy to Rs 80.61/litre. However, within weeks, the levy was raised again.
Is there petroleum levy on LPG and kerosene oil?
Yes. Kerosene oil carries a petroleum levy of Rs 20.40/litre. Light Diesel Oil (LDO) carries Rs 15.80/litre. LPG (Liquefied Petroleum Gas) is subject to a levy of Rs 4,669/tonne plus 18% GST. Hi-Octane blending components and E-10 gasoline have levies of Rs 25 to Rs 75/litre. These rates are generally lower than petrol since these fuels serve rural and economically vulnerable segments.
How often is the petroleum levy revised in Pakistan?
OGRA issues fuel price notifications twice a month — on the 1st and 16th of each month. The petroleum levy component can be changed with each revision and is set by the PM / Ministry of Finance based on IMF conditions, global oil prices, the exchange rate, and fiscal targets. In some cases, such as during the April 2026 crisis, revisions were made within 24 hours of each other.
Will petroleum levy on petrol go down in 2026?
In the short term, a significant, sustained reduction is unlikely. The IMF's ongoing EFF programme demands continued high levy collection, and the government is still working to meet its Rs 1.468 trillion target for FY2025-26. A climate support levy increase (Rs 2.5 → Rs 5/litre) is also expected from July 1, 2026. Any levy reduction would likely be temporary (as seen in April 2026) unless global oil prices fall sharply or Pakistan restructures its IMF conditions.
How much petroleum levy did Pakistan collect in FY2024-25?
Pakistan collected Rs 1,220.213 billion (approximately Rs 1.22 trillion) in petroleum levy during FY2024-25. In the two calendar years 2024 and 2025 combined, total petroleum levy collections reached a record Rs 2.59 trillion. For FY2025-26, the government has set a target of Rs 1,468.395 billion — the highest in Pakistan's history.
Transparency & Accuracy
Sources & Verification
All data on this page has been verified against primary and authoritative sources. Our editorial team cross-references every figure before publication:
- OGRA — Oil & Gas Regulatory Authority official notifications (ogra.org.pk)
- Ministry of Energy, Petroleum Division — Official fortnightly price circulars
- The Express Tribune — Verified fuel pricing reports (April–May 2026)
- Daily Pakistan — May 9, 2026 petroleum levy notification report
- PakWheels Blog — Data analysis: "Petrol Relief or Tax Reset?" (April 2026)
- Geo.tv / Dawn / Business Recorder — IMF conditions and levy timeline
- IMF Article IV Reports & EFF Programme Documents — Fiscal targets
- World Bank GDP per capita data — Fuel affordability comparison
Disclaimer: This page is an independent informational resource published by PetrolPricePakistan.com. All petroleum levy rates and petrol prices are sourced from official OGRA notifications and verified media reports. Prices are revised fortnightly; always check the latest OGRA notification for the most current figures. This content is intended for informational purposes only and does not constitute financial or policy advice. Last updated: May 9, 2026.