Govt imposes climate support levy on petroleum products

ISLAMABAD: Pakistan has imposed a climate support levy on oil products due to the constant insistence of the International Monetary Fund (IMF).

According to details, with the start of the new financial year 2025-26, the federal government has implemented new levies on petroleum products per the International Monetary Fund’s (IMF) climate financing requirements.

A new “Climate Support Levy” of Rs 2.50 per liter has been levied on petrol, diesel, and kerosene. The levy has been brought down by lowering the earlier applicable Petroleum Development Levy (PDL).

With the new setup, the PDL on petrol has been lowered to Rs 75.52 per liter to include the carbon levy. Earlier, petrol was charged a PDL of Rs 78 per liter.

For high-speed diesel, the PDL has been lowered to Rs74.51 per litre from the previous Rs78 per litre to permit the adjustment of the climate levy.

On kerosene, a fresh Climate Support Levy of Rs2.50 has been added over and above the existing Rs18.95 per litre PDL. Light diesel, too, still has a PDL of Rs15.37 per litre.

The Pakistan government’s decision to introduce the Climate Support Levy is part of fulfilling its IMF conditions under the international climate financing framework.

It can be pointed out that the federal government raised petrol prices for the fortnight ahead, increasing the petrol price by Rs8.36 a litre.

As per a notification released by the Pakistan Finance Ministry, the petrol price had been raised by Rs14.80 per litre, taking the new petrol price to Rs266.89 per litre.

In the same vein, the high-speed diesel price had been raised by Rs 10.39 per litre, and the new rate of Rs 272.98 per litre was fixed in Pakistan.