You Now Pay 50% Higher Petrol Tax in Pakistan While it’s Still Cheaper Worldwide

The federal government has sharply increased the tax component on petrol to Rs. 117.41 per liter, nearly 50 percent higher after Friday’s fuel bomb compared to Rs. 78 per liter recorded in May 2025.

According to official documents, the Petroleum Division raised the petrol levy by Rs. 13.91 per liter, up from Rs. 103.50 previously. A similar increase was applied to high-speed diesel, where the levy climbed to Rs. 42.60 per liter from Rs. 28.69.

While unfortunate, only after the levy increase were new fuel prices fully make sense.

Under the latest notification effective May 9, 2026, petrol prices rose by Rs. 14.92 per liter to Rs. 414.78, while high-speed diesel increased by Rs. 15 per liter to Rs. 414. 58.

Yesterday’s petrol bomb was notified despite international petrol prices remaining largely unchanged during the week. Based on global benchmarks, petrol’s ex-tax price stayed close to Rs. 268 per liter. So now everyone should realize that most of the increase came from the increased petroleum levy only.

For diesel, global price trends translated into an estimated increase of roughly Rs. 7.5 per liter, yet consumers will now be charged double that amount at the pump.

The widening gap between international fuel costs and domestic retail prices suggests the government is increasingly relying on petroleum levies as a revenue tool.

Some might argue this hike adequately was just another condition for unlocking a $1.3 billion loan from the International Monetary Fund. The lender’s executive board approved the funds shortly before the new fuel prices were notified.

The Federal Board of Revenue (FBR) is currently facing a significant fiscal challenge. FBR has recorded a revenue shortfall exceeding Rs. 600 billion during the ongoing fiscal year. The higher petroleum levy collections will probably be used to help bridge that gap and meet IMF-linked targets.

The growing tax burden on fuel has pushed Pakistan into one of the region’s most expensive fuel markets relative to average incomes, despite limited changes in global crude oil prices.

Public reaction on social media platform X has been swift, with many users questioning why near-record petrol prices persist even when a reduction would have made more sense since international markets showed little volatility this week.

Sustained high fuel prices will continue feeding inflation through transportation costs, food supply chains, and household expenses. This will more burden on consumers already dealing with rising electricity tariffs and overall cost-of-living increases.

It is pertinent to mention here that the federal government hasn’t formally linked the levy hike to recent tax shortfalls.

Why Enfield Royal Clinic is Islamabad’s Most Trusted Name for Cosmetic Surgeries?

-->

but there is no inflation yet as per gorment’s intelligent statisticians 😂🤣