Shocking: Actual Price of Petrol and the Money Govt Makes Per Liter in Taxes

The government of Pakistan’s welfare state has been charging nearly 100 percent additional levy on petrol and diesel in the name of taxes for generating handsome revenues for the national kitty, revealed a response tabled in National Assembly.

According to a calculation, the ex-factory price of petrol and diesel is almost half of what these products are being sold at the petroleum pumps at Rs. 69.50 per liter and Rs. 77.40 per liter.

This essentially means that petrol and diesel is sold at around Rs. 30 to Rs. 35 per liter by the factories.

The rest of the cost is taxes of the government levied on every liter for consumers of these petroleum products irrespective of their income group or purchasing power.

The revelation of the 100 percent overcharging of money by the government was based on the calculation carried out by Pakistan State Oil (PSO) on the demand of Public Accounts Committee of National Assembly.

Syed Khursheed Shah, Head of Public Accounts Committee, National Assembly, wrote a worth-reading letter to the Prime Minister Shahid Khaqan Abbasi, who was previously served as the Minster for Petroleum and Natural Resources.

The letter reads:

Dear Mr. Prime Minister,

PSO officials in response to a query of Public Accounts Committee regarding the actual prices of petroleum products revealed that petrol and diesel are purchased at Rs. 30 to Rs. 35 per liter and sold at Rs. 70 to Rs. 80 per liter.

There is huge difference in actual cost of these products and and the consumer prices.

Almost double price is being charged from consumers through imposition of high taxes and levies.

This is great injustice with the consumers of whom around 70 to 80 percent belong to low income group and posses motor bikes, auto rickshaws, low power vehicles, tractors, etc.

High prices of these products also results in unwarranted inflation which puts an additional burden on general public especially the poor class and slows also the economic activity in the country.

According to the letter obtained by ProPakistani, he requested the new PM to review the heavy taxation of the petroleum products which caused burden on the majority of the population in Pakistan.

Pakistan is a welfare state and it is responsibility of the government to provide relief to the public  through its policies and actions.

Burdening a common man with hefty indirect taxes is totally unjustified and should be stopped immediately.

Pricing of Petroleum Products

Heavy taxation and levies are not only applied to petrol or diesel only but it is applicable on all petroleum products.

Besides an ex-factory price of petrol/ diesel, a consumer pays off General Sales Tax and Petroleum Levy to the Government.

Also, the price includes a certain margin of Oil Marketing Companies (PSO, Shell, Total and etc,) and of dealers, the petrol pump owners.

The cost of transportation of petroleum products from depot to petrol pumps is also included in the one liter of petrol and diesel.

In reality, the petroleum product prices are based on ex-factory prices and 100 additional cost including taxes and margins/expenses under different heads.

It is worth mentioning here that petroleum products are major contributor in the overall collection of indirect taxes in Pakistan. Not only PML-N government but also the previous government of Pakistan Peoples’ Party (PPP) relied on this tax for revenue collection.

Petroleum product prices could be reduced for the general public by easing of tax rate by the government, especially GST or Petroleum Levy.


  • 100 % ki jaga pe 70% bhi charge karen to price 51 to 56 rahe ge, lekin govt aisa q kare ge, loot k pese kum ho jain gen.

    • bhae pakistan mai tax koe nae deta – sirf job sector mai government by force companies say detect ker lete hai – baqi Lawyers – judges – traders give zero tax – so this is the only way to detect taxes via indirect taxes you see on electricity , gas and patrol-

      • Haan to beta jo taxes detay hain unnko kia faida? WHy should taxpayers have to pay the same for petrol despite paying income taxes? There should be seperate fuel rates for tax payers and tax evaders!

        • there is no choice – there is no if and buts by hook or by crook government takes the tax and hopefully on day of judgement we might get rewards for this forced taxing and I am pretty hopefull actual reward will be given by Allah mighty- baqi mai keh rha hon jub us mulk mai koe tax nae de ga government per usi tera chor bazari se tax laite rae ge without any acknowleging awam :) apki baat sae there should be thousand of more things needs to be fixed like taxation on fuel – lets see – kab tabdeele aye ge

  • And still fuel is cheapest in Pakistan.
    If we don’t pay taxes the Govt will extract it one or the other.

    • It’s a huge responsibility of our appointed leaders to make sure each sector is properly performing its duties. Is a Government institute like FBR making sure proper Tax collection is regulated and if required, using the power and resources they are provided with?
      But in a country where even its Prime Minister has a questionable morality how can you expect a mere FBR official to perform his/her duties with integrity?

  • Vote Aap Logon Ne Phir Ganjon Aur Zardari Ko He Denay Hain… Sahi Jaahil Awaam Hai Humari!

  • The worst thing is that all this money they collect goes on to protect, publicize and enrich them. Around 10%-15% is actually spent on tax payers. It would have been better that the state which can’t make good use of our money actually don’t charge us. We can make better use of this money ourselves.

  • So alot of u might not agree to what i am about to say. Firstly petrol in pakistan is one of the cheapest in the world so pakistan is not the only country charging taxes. Plus only 5% of population pays taxes so govt needs a way to generate revenue.
    Now even if price is reduced to 30 it would have adverse effects on our economy. Because when price goes down demand increase and 80% of oil is imported and it takes huge chunk of our import bill . So it would mean we would have to import more it will destroy balance of payments(imports vs exports) our dollars reserves will deplete rapidly and our own currency will become worthless .
    Not only direct impact but also indirect impact like people would start using personal transport rather then opting for public so more traffic on roads , increased air pollution , traffic jams, upgradation of current infrastructure plus more parts of bikes and cars will be imported so more outflow of foreign reserves.
    In short economy and economic decisions are not just black and white every decision is takes thinking about macro level not micro

    • If 5% of population pays taxes then isn’t govt. incompetent?
      Secondly, if prices reduces then industries (our main is textile) will be automatically able to produce more products results in increase in export + more job opportunities and who is responsible for money laundering worth of billions of dollar every year?
      Thirdly, If condition of public transport will get better then who fool will consume 100 or 200 rupees of fuel instead of 10 or 20 rupees ticket.

      niyat theek ho to sab theek ho jata hai.

  • 100% kay bajaye 200% tax lelo .. lekin usko awam ke oper lagao to sahi….. karachi aahhista aahista mohenjo daro banta ja raha hay…. sab road tooti pari hain… koi pursaan-e-haal nahi is shaher ka..

  • One thing Which is not mentioned in the post that petrol pumps are charging additional Rate other than Govt Fixed rates. As in our City Hasilpur Petrol Price is 71.1 per liter and Diesel at 79 Rs on the name of transportation while you have mentioned that transportation cost is already included by the Govt in per Liter Price.

  • we live here in Canada in the province of Alberta the largest oil reserved after Saudi Arabia Alberta is oil rich province with own oil produces we are paying about Pk Rupees 80.00 per liter and out of that is about 32.00 rupees in taxes…so keep in mind that we have our own oil, in compare to Pakistan where we have to buy the oil from other countries and still paying less then what we pay here in Canada…when we will start paying taxes and think about the country before ourselves…always complaints but not paying enough to run the government..

  • Taxes are huge on everything in Pakistan. Even we are the first country to impose tax on Internet. so the government is just making money out of everything rather than motivating us.

  • Its still cheaper then India and other countries. So Enjoy Being Pakistani. Don’t blame the gov. Also no point to publish this article this is already known by almost every Pakistani and BTW there is no shocking in this story as you written in news heading. It looks very cheap and sensational like something had happened which should not be happening and nobody know it. I am very disappointed by the writer.


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