No decision yet on petroleum levy, says FinMin Aurangzeb

Federal Finance Minister Muhammad Aurangzeb has clarified that no discussions have taken place regarding a petroleum levy in the proposed Budget 2025–26, ARY News reported.

Speaking on ARY News’ program “Khabar”, the minister stated that while revenue could potentially be increased through a carbon levy, the petroleum levy has not yet been considered. He emphasized the need to prioritize taxation and environmental concerns.

“We need to take steps to enhance revenue collection,” he said, adding that last year the government also highlighted enforcement as a means of boosting revenue.

Muhammad Aurangzeb asserted that the figures presented in the Economic Survey are accurate. He questioned why tariff reforms, which should have been implemented earlier, were delayed.

The minister noted that the current budget includes reductions in various taxes. “In the past, what tax has ever been increased and then reduced? This is a significant change,” he added.

Touching on structural reforms, he admitted that while there is frequent talk of change, implementation often falls short. He said substantial progress has been made regarding financing for the export sector, and work is ongoing on tax reforms.

Muhammad Aurangzeb also highlighted developments with Pakistan International Airlines (PIA), stating that it was relaunched a month and a half ago.

“PIA’s European routes have reopened, and the UK route is expected to resume soon. The airline’s image is improving, which will aid in its privatization,” he concluded.

Earlier, in the Budget 2025-26, the government imposed a carbon levy of Rs 2.5 per liter on petrol and diesel, a move expected to directly impact fuel prices.

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.