The federal government has sharply increased the petroleum levy on petrol by Rs. 24.74 per liter, a move that appears to have absorbed a significant portion of the relief consumers could have received from lower international oil prices.
Under the latest notification, the ex-depot price of petrol was reduced by Rs. 4 per liter to Rs. 377.78 per liter, while the price of high-speed diesel was left unchanged at Rs. 380.78 per liter. The adjustment marks the fourth consecutive reduction in petrol prices, with cumulative cuts of around Rs. 37 per liter over recent weeks.
However, alongside the price revision, the government increased the petroleum levy on petrol from Rs. 91.34 per liter to Rs. 116.08 per liter, an increase of Rs. 24.74 per liter.
The government also revised taxation on other petroleum products. The petroleum levy on high-speed diesel was reduced by Rs. 24.34 per liter, bringing it down from Rs. 68.93 per liter to Rs. 44.59 per liter. Meanwhile, the levy on kerosene was maintained at Rs. 20.36 per liter, although the retail price of kerosene was increased by Rs. 8.70 per liter to Rs. 280.70 per liter.
According to recent reports, the total tax burden on petrol already stood at around Rs. 125 per liter, including the petroleum levy, customs duties, and climate-related charges. The latest increase further strengthens petroleum levy collections, which have become one of the government’s most important sources of non-tax revenue and a key component of fiscal management efforts.
Analysts say the latest pricing decision highlights the government’s strategy of using fuel taxation to support revenue targets while limiting the fiscal impact of fluctuations in international oil markets. As a result, consumers are seeing only a portion of the relief generated by declining global oil prices reflected in retail fuel rates.