ISLAMABAD: The government has decided to impose a carbon levy on petroleum products in the upcoming fiscal year 2025-26.
Under this plan, the levy will start at 2.5 rupees per liter in the first year and increase to 5 rupees per liter in the second year.
According to sources, this is expected to generate approximately 45 billion rupees in revenue in the next fiscal year, with the income from the carbon levy projected to double during the fiscal year 2027.
The implementation of the carbon levy is feared to lead to further increases in the prices of petrol and diesel, as this levy will be applied alongside the existing petroleum development surcharge (PDL) on these fuels. However, kerosene and light diesel oil will not be subjected to this levy.
Sources indicate that no new legislation will be required to implement the carbon levy in the upcoming budget, and the revenue generated will be allocated toward green budgeting initiatives. The purpose of this move is to achieve environmental protection goals while also increasing government revenue.
The economic team and IMF negotiations regarding the budget have been completed, and the government’s decisions suggest that additional financial burdens may be placed on the public.
