- The tax on petrol remains Rs 105.37 per liter and diesel Rs 55.24 per liter.
- The government will pay the gasoline and diesel subsidy from March 14 to 20.
- Adjustments to oil taxes are part of the IMF’s commitments.
ISLAMABAD: The federal government has decided to maintain the petroleum tax (PL) on petrol and diesel and issued a notification confirming the move.
Petrol will continue to be taxed at Rs 105.37 per litre, while high speed diesel (HSD) will remain at Rs 55.24 per litre.
Existing prices will remain unchanged until further notice.
The move follows a 25% increase in PL from Rs 84.40 per liter to Rs 105.37 on March 1, 2026, after the US-Israel war with Iran. The maximum depot price increased from Rs 266.17 on March 1 to Rs 321.17 per liter on March 7, with the PL constituting 32% of the depot price.
For HSD, the PL was reduced from Rs 76.21 to Rs 55.24 per liter on March 7, while the ex-depot price increased to Rs 335.86 per liter.
The government will pay a subsidy of Rs 23 billion to keep petrol and diesel prices stable from March 14 to 20. This includes Rs 49.63 per liter for petrol and Rs 75.05 per liter for diesel. The Oil and Gas Regulatory Authority (Ogra) will release the funds after auditing the claims submitted by oil marketing companies.
The PL adjustments are part of the government’s commitment to the International Monetary Fund (IMF) to boost non-tax revenues. GST on petrol remains at zero; If the standard 18% GST were applied, the total tax burden would exceed 40%.
The government has set a revenue target for PL of Rs 1.47 trillion for the current fiscal year, up from Rs 1.28 trillion last year. Collections during the first six months (July-December) reached Rs 822 billion.
Meanwhile, the price of kerosene oil has increased by Rs 39.20 per litre, with Ogra fixing the new rate at Rs 358.01, up from Rs 318.81.
Prime Minister Shehbaz Sharif also approved a savings fund, into which the Economic Coordination Committee of the Cabinet allowed Rs 27.1 billion to be transferred.
