The Government of Pakistan has decided to increase the Petroleum Development Levy (PDL) on petrol and diesel to more than Rs100 per litre starting July 2025. This move is part of the country’s promises made under the International Monetary Fund’s (IMF) Extended Fund Facility program.
At present, the levy is Rs78 per litre on petrol and Rs77 per litre on diesel. By raising the levy, the government aims to increase its non-tax income, which will help support power sector subsidies. These subsidies are important to reduce the country’s growing circular debt problem, especially in the energy sector.
In addition to the PDL increase, a new carbon levy of Rs5 per litre will also be applied. The purpose of this new carbon levy is to support environmental and climate-related reforms. It shows that the government is not only trying to manage its finances but is also taking steps to fight climate change.
These changes will likely make fuel more expensive for the public. However, officials say that the extra income from these levies is necessary to keep the country’s economy stable and to meet targets agreed with the IMF.
The decision will be fully implemented in the new financial year starting from July 2025. People across the country should prepare for higher fuel prices as part of these financial adjustments.
