No immediate relief

Pakistan's government has ruled out an immediate reduction in the petroleum levy, despite sustained pressure from Jamaat-e-Islami for fuel relief. Planning Minister Ahsan Iqbal told reporters on 29 October that any phased decrease would be considered only from the next federal budget, and only if fiscal space allows. The message leaves motorists facing the current charges for now, with relief pushed into a future budget cycle rather than delivered at the pump this winter.

What the figures show

The scale of the levy was laid before parliament in a written reply from Petroleum Minister Ali Pervaiz Malik to the National Assembly. Collections from 2022-23 to 2025-26 totalled about Rs4.4 trillion, against a cumulative target of roughly Rs4.2 trillion, an overshoot of Rs227 billion. Provisional collection in the last completed year reached Rs1.567 trillion against a Rs1.468 trillion target, while the current year's budget estimate stands at Rs1.676 trillion. On each litre, motorists currently pay Rs80 in petroleum levy, Rs5 in climate levy and Rs20.56 in customs duty, nearly Rs106 in charges before the underlying fuel cost.

What happens next

A six-member joint committee, with Deputy Prime Minister Ishaq Dar, Iqbal and Rana Sanaullah representing the government and three nominees from Jamaat-e-Islami, will examine proposals for a phased reduction. The minister also told the assembly that levy collection forms part of the fiscal targets agreed with the International Monetary Fund under its Extended Fund Facility, which limits how quickly any cut can be made. No timetable, size or funding for a reduction has been published, and the committee's terms of reference remain unpublished.

Sources: Energy Update | The Pakistan Daily