Fuel prices set to rise as govt imposes carbon levy

ISLAMABAD: In the Budget 2025-26, the government has imposed a carbon levy of Rs 2.5 per liter on petrol and diesel, a move expected to directly impact fuel prices, ARY News reported.

According to reports,  furnace oil will be subjected to a carbon levy of Rs 2,665 per million tons, based on the same per-liter rate.

These new levies form part of the government’s strategy to increase regulatory control and promote environmental responsibility.

To curb smuggling in the fuel and transport sectors, a cargo tracking system is also set to be implemented, aiming to strengthen oversight and compliance mechanisms.

The introduction of the carbon levy on petroleum products under the Budget 2025-26 signals a likely rise in fuel costs, affecting both consumers and industries reliant on transportation and energy.

 

Earlier, Finance Minister Muhammad Aurangzeb announced the Budget 2025-26, which includes significant reductions in various regulatory duties expected to lower the prices of many goods.

According to Budget 2025-26, Finance Minister Muhammad Aurangzeb announced a 2 percent to 5 percent cut in regulatory duties. As a result, a wide range of imported items from daily use products to food items will become more affordable.

After the implementation of the Budget 2025-26, the reduction in import duties is expected to bring down the prices of over 600 food and beverage products.

Read More: Budget 2025-26 price cuts revealed

These include imported chocolates, toffees, candies, lollipops, biscuits, jellies, marmalade, cheese, butter, honey, and beverages, all of which will see a 2 percent to 5 percent drop in duties.

Additionally, the prices of imported milk cream, flavored milk, condensed milk, ketchup, mayonnaise, ice cream, imported snacks like papadum (papad), nimco, chips, marshmallows, vitamin water, mineral water, branded flour and semolina are also expected to decrease.

The Budget 2025 also offers significant relief to women, as nearly all makeup and cosmetic products are likely to become cheaper due to reduced duties.

These include beauty tools, kits, hair styling products, blush, powder, mascara, face wash, facial creams, face shiners, eyeliners, lotions, perfumes, body sprays, shaving items, and wigs.

In addition, dental products, purses, sunglasses, belts, travel bags, handbags, garments, and shoes will also become more affordable under the new 2025-26 budget.