Petroleum levy collections surpass last fiscal year’s target

Summary: The federal government has collected Rs220 billion in petroleum levy during the first two months of the fiscal year 2026-27. The government has set a target of collecting a total of Rs1.676 trillion in this regard for the current fiscal year. In the previous fiscal year too, petroleum levy collections were about Rs100 billion higher than the set budget target.

ISLAMABAD: The federal government has collected Rs220 billion in petroleum levy during the first two months of the fiscal year 2026-27, while the overall collection target for the current fiscal year has been set at Rs1.676 trillion.

According to available data, the government collected Rs220 billion from levy on petroleum products during July and August 2026. This amount has been collected at a time when the government continues to depend on petroleum levy to meet its fiscal targets.

The target for petroleum levy collections for the current fiscal year has been set higher than that of the previous fiscal year. The government aims to collect Rs1.676 trillion from this source for the national exchequer.

During the previous fiscal year 2025-26, the government had collected Rs1.567 trillion from petroleum levy, while the initial budget estimate was set at Rs1.468 trillion. Thus, the collections were about Rs100 billion higher than the set target.

Petroleum levy is levied on petrol, diesel and other petroleum products and is an important source of revenue for the federal government. The money collected through it helps meet the government’s financial needs and contain the budget deficit.

However, petroleum levy is also directly related to fuel prices. Due to this, an increase in petrol and diesel prices or a higher levy rate may affect consumers, transport costs and business costs.

Despite the increase in petroleum levy collections, the government faces the challenge of balancing fiscal needs with the impact of fuel prices on the public.