Govt Shares Long-Term Plan With IMF to Collect Nearly Rs. 11 Trillion Tax on Fuel

The federal government is planning a sharp increase in petroleum levy collections over the coming years, with official documents showing a target to collect more than Rs. 10.78 trillion from consumers during the next five years.

According to the documents, the cumulative petroleum levy collection from 2021 to 2031 is projected to reach Rs. 16.27 trillion. Over the past five years, the government has already collected Rs. 4.49 trillion through the levy.

The government has assured the International Monetary Fund (IMF) that petroleum levy collections will remain a key source of revenue, with consumers expected to bear a burden equivalent to around 1.2 percent of GDP annually.

For FY2026-27, the government has proposed collecting Rs. 1.727 trillion through the petroleum levy. The target is expected to rise further to Rs. 1.915 trillion in FY2027-28 as authorities seek to strengthen non-tax revenue streams and support fiscal consolidation efforts.

The levy collection target continues to increase in subsequent years. The annual collection is expected to reach Rs. 2.37 trillion within the next few years before climbing to Rs. 2.637 trillion by FY2030-31.

The petroleum levy has become one of the government’s largest revenue sources in recent years, particularly as authorities have relied on fuel-related charges to meet budget targets without directly increasing income taxes.

Unlike some other taxes, petroleum levy proceeds are not shared with provinces, making it an important revenue stream for the federal government.

The latest projections come ahead of the FY2026-27 federal budget, which is expected to target overall revenue growth while maintaining commitments agreed with international lenders.