ISLAMABAD: The federal government has doubled the Climate Support Levy on petrol and high-speed diesel from Rs. 2.50 per liter to Rs. 5 per liter, effective July 1, 2026, under the Finance Act 2026 as part of Pakistan’s fiscal reforms and commitments under the International Monetary Fund (IMF) program.
According to an official notification, the revised Climate Support Levy applies to both petrol and high-speed diesel (HSD) from July 1.
Petroleum Levy Reduced to Offset Climate Levy Increase
To ensure that consumers are not burdened with additional fuel taxes, the government has simultaneously reduced the Petroleum Levy on both fuels.
| Fuel | Previous Petroleum Levy | Revised Petroleum Levy | Climate Support Levy |
|---|---|---|---|
| Petrol | Rs. 66.66/liter | Rs. 64.14/liter | Rs. 5.00/liter |
| High-Speed Diesel | Rs. 79.97/liter | Rs. 70.04/liter | Rs. 5.00/liter |
The adjustment replaces part of the Petroleum Levy with the Climate Support Levy instead of imposing an additional tax burden, resulting in a restructured fuel taxation system.
Retail Fuel Prices Remain Unchanged
Despite the 100 percent increase in the Climate Support Levy, retail prices of petrol and high-speed diesel remain unchanged. The increase has been fully offset by a corresponding reduction in the Petroleum Levy, meaning consumers will not pay higher prices solely because of this tax adjustment.
Climate Support Levy Introduced Under Finance Act 2026
The Climate Support Levy was introduced through the Finance Act 2026 to generate dedicated revenue for climate-related projects and environmental initiatives. The levy also forms part of Pakistan’s broader fiscal reform agenda and supports commitments made under the country’s IMF-backed economic program.
The latest revision marks the government’s continued effort to restructure petroleum taxation while maintaining fuel prices and securing funding for climate resilience and sustainable development.
