Govt raises climate levy, cuts petroleum levy to maintain fuel prices

ISLAMABAD: The federal government has doubled the Climate Support Levy on petrol and high-speed diesel from Rs2.50 to Rs5 per litre, while simultaneously reducing the Petroleum Levy by Rs2.50 per litre to ensure there is no immediate increase in fuel prices for consumers.

According to a notification issued by the Ministry of Energy’s Petroleum Division, the revised levies came into effect on July 2.

The government said the adjustment was made to maintain existing prices of petroleum products, preventing any additional financial burden on consumers despite the increase in the climate levy.

The notification states that the Climate Support Levy has been introduced to generate financial resources for environmental protection, climate change mitigation and other eco-friendly initiatives. With the latest revision, the levy now stands at Rs5 per litre.

To offset the impact of the higher climate levy, the government has reduced the Petroleum Levy by the same amount, ensuring the overall tax burden on petrol and diesel remains unchanged.

Government sources said the adjustment means there will be no immediate increase in the retail prices of petrol and high-speed diesel, allowing consumers to continue purchasing fuel at current rates. The government has been reviewing petroleum prices regularly based on fluctuations in global crude oil prices, the exchange rate and applicable taxes and levies.