Despite a substantial reduction in petroleum prices, taxes continue to make up nearly 29% of the retail price of both petrol and diesel, according to sources in Pakistan’s Petroleum Division.
The federal government on Saturday reduced the price of petrol by Rs74.28 per litre and diesel by Rs67.31 per litre. Following the revision, petrol is now available at Rs299.50 per litre, while diesel is being sold at Rs311.47 per litre.
The reduction comes amid easing pressure in international energy markets and follows recent developments in the Middle East that have helped stabilize global oil prices.
Tax Component in Petrol
Petroleum Division sources revealed that the current petrol price includes Rs88.07 per litre in taxes and levies.
The breakdown is as follows:
- Customs Duty: Rs19.32 per litre
- Petroleum Levy: Rs66.25 per litre
- Climate Support Levy: Rs2.50 per litre
These charges collectively account for approximately 29% of the retail price consumers pay at fuel stations.
Diesel Also Carries Significant Taxes
Similarly, diesel prices continue to include a sizeable tax burden.
According to officials, diesel contains Rs91.15 per litre in taxes, including:
- Customs Duty: Rs15.68 per litre
- Petroleum Levy: Rs72.97 per litre
- Climate Support Levy: Rs2.50 per litre
Among these, the petroleum levy remains the largest contributor to the overall tax component on both fuels.
Pakistan Cuts Petrol and Diesel Prices by Rs22 Per Litre Ahead of Eid
Fuel Prices Saw Sharp Rise During Regional Conflict
Pakistan has been reviewing petroleum prices more frequently since the outbreak of the US-Israel-Iran conflict on February 28, shifting from its traditional fortnightly review mechanism to weekly assessments due to volatility in global oil markets.
At the start of the conflict:
- Petrol was priced at Rs258.17 per litre
- Diesel was priced at Rs275.70 per litre
As international crude oil prices surged and supply concerns intensified, fuel prices in Pakistan also climbed sharply.
During the peak of market uncertainty:
- Petrol reached Rs458.41 per litre
- Diesel rose to Rs520.35 per litre
These unprecedented increases placed significant pressure on consumers, transport operators and businesses across the country.
Relief Following Middle East De-escalation
The recent reduction in fuel prices came after a temporary easing of tensions in the Middle East, which helped bring international oil prices down from their highs.
Following the latest price cut, Prime Minister Shehbaz Sharif said the government had fulfilled its commitment to provide relief to the public whenever market conditions allowed.
However, despite the decrease in retail prices, taxes and levies continue to represent a substantial portion of what consumers pay at the pump, highlighting the government’s continued reliance on petroleum-related revenues to support public finances.
