The change was detailed in recent notifications from the Finance Division. Sources indicate the levy on high-octane blending component (HOBC) rose by the same amount, while high-speed diesel saw a smaller increase of about Rs 0.80 per liter. A separate climate support levy of Rs 2.50 per liter continues on petrol, diesel, and HOBC.
This move follows the Federal Board of Revenue’s (FBR) performance in the first half of the fiscal year 2025-26. The FBR fell short of its revised tax target by around Rs 335-336 billion for July to December, after collecting roughly Rs 6,169 billion against expectations. The original annual goal was even higher, leading to a larger gap of over Rs 500 billion in some early estimates. Officials point to the need for steady revenue streams to cover budget requirements and meet commitments, including those linked to international agreements.
Despite lower Brent crude prices hovering near $59 per barrel in mid-January, the government chose to keep overall petrol and diesel rates unchanged for the second half of the month. Petrol remains at Rs 253.17 per liter, and high-speed diesel at Rs 257.08 per liter.
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Analysts note that keeping levies high adds pressure on household spending and business costs. Transport operators, farmers, and daily commuters feel the pinch most, as fuel makes up a big part of operating expenses. Higher diesel rates often push up prices for goods moved by trucks and buses, adding to everyday inflation.
The government has committed under past arrangements to raise the petroleum levy toward Rs 100 per liter over time. Recent proposals, including one to add around Rs 5 per liter to tackle gas sector circular debt, show ongoing reliance on fuel-based charges for fiscal support.
