Fuel prices remain unchanged as govt adjusts levies
Petroleum Division late Wednesday issued notifications confirming revised levies came into effect from July 1
Published July 02, 2026
- Climate Support Levy raised by Rs2.50 per litre to Rs5 per litre.
- Petroleum Levy on petrol and diesel reduced by Rs2.50 per litre.
- Same levy adjustments also apply to HOBC.
ISLAMABAD: The federal government has decided to double the Climate Support Levy on petrol and diesel to Rs5 per litre, offsetting the increase with an equivalent cut in the Petroleum Levy so that retail fuel prices remain unchanged for consumers.
The Petroleum Division late Wednesday issued notifications confirming that the revised levies came into effect from July 1.
Under the new notification, the Climate Support Levy on both petrol and diesel has been increased by Rs2.50 per litre, taking the levy from Rs2.50 to Rs5 per litre.
The same increase has also been applied to the high-octane blending component (HOBC).
To offset the increase in the Climate Support Levy, the government has reduced the Petroleum Levy on petrol and high-speed diesel by Rs2.50 per litre.
The Petroleum Levy on HOBC has also been cut by Rs2.50 per litre.
As a result of the simultaneous increase in the Climate Support Levy and reduction in the Petroleum Levy, the current retail prices of petrol and diesel remain unchanged despite the revision in the tax structure.
The Petroleum Division issued the notifications as part of the government's revised fuel levy framework, which took effect from July 1.
The latest changes come after the federal government last week kept the prices of petrol and diesel unchanged at Rs299.50 and Rs311.47 per litre, respectively, following its fuel price review.
On June 19, the government announced a substantial relief package, cutting petrol prices by Rs74 per litre and diesel by Rs67 per litre, following a sharp decline in international crude oil prices and easing tensions in the Middle East.
The reduction, announced by Prime Minister Shehbaz Sharif, was aimed at passing on the benefit of falling global oil prices to consumers.
That relief had followed the US-Iran peace agreement, brokered in part through Pakistan's diplomatic efforts, and the subsequent reopening of the Strait of Hormuz, a critical global energy transit route whose reopening helped calm supply concerns and pushed crude prices lower.
Kerosene oil also saw a steep cut at the time, falling by Rs48.29 per litre to Rs233.90.
Since then, however, the government has been recalibrating the levy structure even as retail prices have largely held steady, with the petroleum levy on diesel rising from Rs72.97 to Rs79.54 per litre and that on petrol edging up marginally from Rs66.25 to Rs66.64 per litre, while the levy on kerosene has remained unchanged at Rs20.36 per litre.
