Tech Desk 
Jun 20, 2025
The Petroleum Division has informed the National Assembly’s Standing Committee on Finance that petroleum products will incur a carbon levy of Rs2.50 per litre starting on July 1, 2025.
Notably, the carbon levy is part of a plan by the Government of Pakistan to raise money and meet climate obligations, as Pakistan has to balance its energy aspirations and climate targets to use energy responsibly and sustainably.
Moreover, the direct consumers affected will be petrol and high-speed diesel (HSD) users comprising transporters and industries that are already facing high fuel prices.
The officials also stated that the petroleum levy is currently Rs77 per litre of HSD and Rs78.02 on petrol, with plans to raise it gradually to a maximum of Rs90 per litre; and while public power plants are moving away from furnace oil, Independent Power Producers (IPPs) still use it.
At the same time, to relieve financial pressure from the power sector, the government is borrowing Rs1.275 trillion from commercial bank borrowing at 0.9% under the three-month KIBOR to settle outstanding electricity generation liabilities.
In the meeting, the committee discussed amendments to a number of key finance laws, including the Electric Power Act and Stamp Act.
Certain clauses were approved, while others, particularly those related to fraud and the now-defunct term "non-filer," were "deferred for the next meeting.
Additionally, the Export Finance Scheme (EFS) came under review. Lawmakers recommended bringing taxes on locally produced cotton in line with those on imported cotton and referred these suggestions to the Secretary of Commerce and FBR Chairman for action.
