Govt eyes whopping Rs1.468tr petroleum levy in next fiscal

ISLAMABAD: The federal government has set a target to collect Rs1.468 trillion in the next budgetary year through the petroleum levy on petroleum products.

The government will also generate Rs105 billion from Captive Power Plants (CPPs) via an off-the-grid levy. Currently, an off-the-grid levy of 5 percent (Rs791 per MMBTU) is imposed on the gas price of Rs3,500 per MMBTU for the export sector. This levy will rise to 10 percent starting July 1, 2025, and further increase to 15 percent from February 2026. By August 2026, it will escalate to 20 percent. However, the government aims to collect Rs105 billion from CPPs through this levy by June 2026.

Additionally, the government expects to collect Rs49.437 billion through the natural gas development surcharge, Rs69 billion from crude oil royalties, Rs138 billion from natural gas royalties, Rs30 billion through discounts retained on local crude prices, Rs20 billion via a windfall levy, Rs2.4 billion through GIDC (Gas Infrastructure Development Cess), Rs5 billion from the petroleum levy on LPG and Rs450 million via a windfall levy on gas.