Government Earns Rs66 Billion Petrol Tax Hike: But Where’s The Money Going?
Islamabad – The Federal Government has disclosed to the Senate that it collected over Rs66.13 billion through the recent increase in the petroleum levy within five and a half months. The revelation came during a session where lawmakers pressed the government on the utilization of the substantial revenue and the ongoing stability of local fuel prices despite a fall in global oil rates.
Federal Minister for Petroleum, Ali Pervaiz Malik, confirmed the figure while responding to a query raised by Senator Kamil Ali Agha. The Minister informed the Upper House that the enhanced levy generated Rs66.13 billion between April 16, 2025, and September 30, 2025. This revenue was a direct result of the government’s decision to increase the levy on petrol by Rs8 per liter and on diesel by Rs7 per liter, which took effect on April 16, 2025.
Senator Agha raised two critical points: first, he questioned why domestic fuel prices had not been decreased for consumers in line with lower global crude oil prices; and second, he sought details on the utilization of the funds, particularly citing the Prime Minister’s indication that the additional revenue would be used for the upgrading of the N-25 Highway.
The Federal Minister clarified that once the petroleum levy is collected, it is deposited into the central treasury, known as the Federal Consolidated Fund. He stressed that allocating these pooled funds to specific public infrastructure projects, such as the N-25 Highway, does not fall within the Petroleum Division’s mandate.
The Minister advised that all questions regarding the actual transfer and expenditure of funds for the N-25 project must be addressed to the relevant ministry responsible for public sector development and budgeting.
The disclosure provided transparency on the scale of revenue generated by the levy hike, even as it left unresolved the lawmakers’ questions about the allocation of the funds and the government’s criteria for domestic fuel pricing.
