Govt targets Rs1,281b from petroleum levy

The federal government has set an ambitious target of Rs1,281 billion on account of Petroleum Levy (PL) on petroleum products for the upcoming fiscal year 2024-25. This projection marks an increase of Rs321 billion over the revised estimate of Rs960 billion for the current fiscal year 2023-24. While the originally budgeted PL for the current year was Rs869 billion, the actual increase represents a 47.4% rise over the target for the next year. The government revised its PL collection target upward for the next financial year 2024-25 under miscellaneous receipts. The International Monetary Fund’s (IMF) report titled “Second and Final Review under the Stand-By Arrangement (SBA),” released in May 2024, revealed that Pakistan presented a plan to collect Rs1,080 billion through PL in the fiscal year 2024-25. Subsequent federal governments have given high priority to PL revenue since it is not part of the Federal Divisible Pool (FDP) that must be shared with the provinces according to the National Finance Commission (NFC) formula.