ISLAMABAD, October 30, 2026: Federal Minister for Planning Ahsan Iqbal has ruled out an immediate reduction in the Rs80-per-litre petroleum levy despite pressure from Jamaat-e-Islami (JI), saying the government will consider a phased reduction in the next federal budget.
Speaking to the media, Iqbal said the government could not afford decisions aimed at gaining temporary public approval that might create a major economic crisis later.
He announced the formation of a committee to examine practical proposals for gradually reducing the petroleum levy in the upcoming budget.
The government will be represented by Deputy Prime Minister Ishaq Dar, Ahsan Iqbal and Rana Sanaullah, while Jamaat-e-Islami will nominate three representatives.
Iqbal said both sides would discuss possible relief measures, stressing that their shared objective was to reduce the financial burden on the public.
Jamaat-e-Islami has been protesting against the government’s decision to impose heavy petroleum levies on fuel.
Government defends petroleum levy amid global uncertainty
The planning minister said the government was making every possible effort to provide relief within its limited financial resources but could not afford to repeat past economic mistakes.
He warned that rising international oil prices and uncertainty in global markets required careful economic planning.
Iqbal said unpredictable international developments, including potential security incidents, could trigger further increases in global oil prices.
He stressed that decisions taken for short-term political popularity should not expose the country to a larger financial crisis.
Currently, the government charges a petroleum levy of Rs80 per litre, a climate levy of Rs5 per litre and customs duty of Rs20.56 per litre, bringing the combined burden to approximately Rs106 per litre.
Petroleum levy collection reaches Rs4.4 trillion
Meanwhile, Federal Minister for Petroleum Ali Pervaiz Malik informed the National Assembly that petroleum levy collection was part of the targets agreed with the International Monetary Fund (IMF).
In written replies submitted to the assembly, the minister disclosed that the government collected Rs4.4 trillion in petroleum levies between FY2022-23 and FY2025-26 against a target of Rs4.2 trillion.
The four-year collection exceeded the government’s targets by Rs227 billion.
During the previous fiscal year, provisional petroleum levy receipts reached Rs1.567 trillion against a target of Rs1.468 trillion.
For the current fiscal year, the government has set a petroleum levy revenue target of Rs1.676 trillion.
The figures highlight the growing importance of petroleum levy revenue in federal finances as the government faces pressure to provide relief to consumers while meeting fiscal commitments.
Oil marketing companies await Rs66.5 billion
Responding to another question in the National Assembly, the petroleum minister said outstanding price differential claims owed to oil marketing companies stood at Rs66.5 billion.
The payments remain pending as the government continues to manage its petroleum-related financial obligations.
The proposed committee will examine options for reducing the petroleum levy in the next budget, although the government has not announced any immediate reduction or specific timeline for implementing relief.