The federal government is considering a proposal to increase the Climate Support Levy on petrol and high-speed diesel in the upcoming Budget 2026-27. If approved, the move could result in higher fuel costs for consumers across Pakistan.
According to reports, authorities are reviewing a plan to raise the levy by an additional Rs2.5 per litre. The current Climate Support Levy stands at Rs2.5 per litre on both petrol and high-speed diesel. Under the proposed change, the levy would increase to Rs5 per litre.
The proposal is being discussed as part of the government’s fiscal planning for the next financial year. Officials are examining various revenue measures while preparing the Budget and fulfilling commitments related to economic reforms and climate policies.
The Climate Support Levy was introduced during the current fiscal year. It was designed to generate revenue while supporting environmental and climate-related initiatives. The levy also forms part of broader efforts to meet obligations under Pakistan’s economic programme with the International Monetary Fund (IMF).
If the proposed increase is included in the Budget, consumers could face additional financial pressure. Fuel prices play a key role in transportation and business costs. Any increase in fuel-related taxes often affects multiple sectors of the economy.
Experts note that higher fuel costs can lead to increased transportation expenses. This may result in higher prices for goods and services as businesses pass on additional costs to consumers. Public transport fares and logistics charges could also come under pressure if fuel expenses rise.
The possible revision comes at a time when many households and businesses are already dealing with rising living costs. Inflation remains a concern for consumers, making any additional burden on petroleum products an important issue.
At present, no final decision has been announced. Government officials are still reviewing the proposal as part of the Budget preparation process. The final taxation measures will become clear once the official Budget documents are released.
If approved, the increase would represent a significant change in Pakistan’s fuel taxation policy. It would also reflect the government’s attempt to balance revenue generation with climate-related objectives.
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The upcoming Budget is expected to provide further details on whether the Climate Support Levy increase becomes part of the fiscal roadmap for 2026-27. Until then, consumers and businesses will be closely watching developments related to fuel prices and taxation policies.
