ISLAMABAD: The federal government has amended the Finance Bill to raise the petroleum levy (PL) to Rs70 per litre on petrol, high-speed diesel (HSD), and high octane blending component (HOBC), from the previous maximum limit of Rs60 per litre. This increase aims to generate Rs1,281 billion for the fiscal year 2024-25, Rs201 billion more than the projection made by the International Monetary Fund (IMF) in its second and final review under the Stand-By Arrangement (SBA) in May 2024.
Additionally, the government has set the PL rate for other petroleum products, including light diesel oil (LDO) and kerosene oil, at Rs50 per litre each. The originally budgeted PL for the outgoing year was Rs869 billion, representing a 47.4% increase for the next fiscal year.
The PL revenue is given high priority by successive federal governments as it is not part of the Federal Divisible Pool (FDP) that must be shared with provinces under the National Finance Commission (NFC) formula.
On Friday, the government passed an amendment to the Petroleum Products (Petroleum Levy) Ordinance, 1961. Initially, the government proposed raising the PL to Rs80 per litre on petrol and HSD, and increasing the levy on other petroleum products like HOBC, LDO, and E-10 gasoline from Rs50 to Rs75 per litre. However, the PL rate for superior kerosene oil (SKO), widely used for cooking purposes, remains at Rs50 per litre.
Story by Wasim Iqbal
