Pakistan imposes climate support levy on petroleum products

Pakistan has imposed a climate support levy on petroleum products on the International Monetary Fund’s (IMF) demand, ARY News reported on Tuesday.

As per details, with the commencement of the new fiscal year 2025-26, the federal government has enforced new taxes on petroleum products in line with the International Monetary Fund’s (IMF) climate financing conditions.

A fresh “Climate Support Levy” of Rs2.50 per litre has been imposed on petrol, diesel, and kerosene. This levy has been adjusted by reducing the previously applicable Petroleum Development Levy (PDL).

Under the new arrangement, the PDL on petrol has been revised down to Rs75.52 per litre to accommodate the carbon levy. Previously, petrol carried a PDL of Rs78 per litre.

For high-speed diesel, the PDL has been revised to Rs74.51 per litre from the earlier Rs78 per litre, to allow for the adjustment of the climate levy.

On kerosene, a new Climate Support Levy of Rs2.50 has been imposed, in addition to the existing Rs18.95 per litre PDL. Similarly, light diesel continues to carry a PDL of Rs15.37 per litre.

The Pakistan government’s decision to implement the Climate Support Levy comes as part of its commitment to IMF conditions under the global climate financing framework.

It may be noted that the federal government increased petrol prices for the next fortnight, pushing the petrol price up by Rs8.36 per litre.

According to a notification issued by the Pakistan Ministry of Finance, the petrol price had been increased by Rs14.80 per litre, bringing the new petrol price to Rs266.89 per litre.

Similarly, the price of high-speed diesel had been raised by Rs10.39 per litre, with the new rate set at Rs272.98 per litre in Pakistan.