Image Petroleum Ministry Official
Ministry proposes lower petroleum levy targets for FY2026-27 amid concerns over rising fuel prices
The Ministry of Petroleum has expressed concerns over the International Monetary Fund’s (IMF) demand to increase petroleum levy targets for the upcoming fiscal year, according to official sources.
In its budget proposals for FY2026-27 submitted to the Finance Ministry, the Petroleum Ministry recommended a levy collection target of Rs 1,000 billion, down from the current fiscal year’s Rs 1,313 billion.
However, the IMF has reportedly pushed for a much higher target of Rs 1,727 billion, representing an increase of roughly Rs 414 billion over the existing target.
The ministry has also proposed capping the levy at Rs 50 per liter, highlighting concerns over fuel affordability. Currently, petrol and diesel are taxed at Rs 108 and Rs 52 per liter, respectively, through petroleum levies and other taxes.
Sources indicated that under the IMF’s recommendations, petroleum levies could rise by 18 percent, potentially reaching Rs 100 per liter, which has prompted internal discussions. A final proposal may see the overall petroleum levy target set at around Rs 1,730 billion for the next fiscal year.
