Pakistan increases petroleum levy, raising inflation concerns

The federal government has significantly increased the petroleum levy on fuel products, raising concerns over a further rise in inflation and increased financial pressure on consumers across the country.

According to official sources, the petroleum levy on petrol has been increased by Rs26.77 per litre, bringing the total levy to Rs107.38 per litre. Previously, the levy stood at Rs80.61 per litre. Officials said the decision was taken to boost government revenue and meet fiscal requirements amid ongoing economic pressures.

The sharp increase in the levy is expected to directly impact fuel prices and, in turn, contribute to higher transportation and commodity costs, potentially fueling inflationary trends in the coming weeks.

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It is worth noting that just a day earlier, the federal government had already increased the prices of petrol and diesel by Rs26.77 per litre. Under the latest notification, the new price of petrol has been set at Rs393.35 per litre, while diesel has been priced at Rs380.19 per litre.

Economists warn that repeated adjustments in fuel prices and taxes could further strain household budgets, especially in the absence of corresponding relief measures. Rising fuel costs often have a cascading effect on the prices of essential goods, including food and transport services.

The government, however, maintains that such fiscal measures are necessary to stabilize revenue collection and manage external financial obligations.

As fuel prices continue to fluctuate, public concern is growing over the overall cost of living, with many expecting further inflationary pressure in the months ahead.