The federal government has significantly increased the petroleum levy on petrol by Rs. 24.74 per litre, effectively reducing the benefit of falling international oil prices for consumers despite a recent cut in retail fuel prices.
According to the latest official adjustment, the ex-depot price of petrol has been reduced by Rs. 4 per litre to Rs. 377.78. However, this relief has been largely offset by the sharp increase in the petroleum levy on petrol, which has risen from Rs. 91.34 per litre to Rs. 116.08 per litre.
The price of high-speed diesel has remained unchanged at Rs. 380.78 per litre, but the petroleum levy on diesel has been reduced by Rs. 24.34 per litre, bringing it down to Rs. 44.59 per litre.
In contrast, the petroleum levy on kerosene oil has remained unchanged at Rs. 20.36 per litre, although its retail price has increased by Rs. 8.70 per litre, now standing at Rs. 280.70 per litre.
The government has also maintained other components of fuel taxation, including customs duties and climate-related charges, which together contribute to a total tax burden on petrol estimated at around Rs. 125 per litre.
Economists note that petroleum levy collections have become a key source of non-tax revenue for the government, helping support fiscal targets and budgetary requirements. However, they also point out that this approach limits the extent to which consumers benefit from declines in global crude oil prices.
Analysts say the latest pricing structure reflects a broader policy trend where fuel taxation is adjusted to balance revenue needs with inflation management. As a result, despite repeated reductions in international oil prices, domestic consumers are receiving only partial relief at the pump.
