Pakistan faces criticism for raising fuel levy despite global oil price drop
Pakistan raises its petroleum levy despite falling global oil prices, drawing criticism for not passing on relief to consumers
Haris Zamir
Business Editor
Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)
The Pakistani government is facing growing criticism for not passing on the benefit of falling international oil prices to consumers, after opting to raise the petroleum levy instead of lowering domestic fuel prices.
The criticism intensified after global crude prices fell sharply over the past week.
Why hasn't Pakistan cut fuel prices despite falling global oil prices?
Pakistan kept domestic petrol and diesel prices unchanged this week even as global crude prices fell sharply, choosing instead to raise the petroleum levy on both fuels. The government says it remains committed to consumer relief, but the higher levy limited how much of the global price drop reached the pump.
Defending the policy, Petroleum Minister Ali Pervaiz Malik said the government remained committed to providing relief to consumers while meeting its international obligations. He added that the policy avoided what he described as an unfair burden on any single sector.
How much did international fuel prices fall?
In a statement posted on X, Malik urged the public to review international Platts prices for petrol and diesel, saying they showed a notable decline in refined fuel costs during the week. According to figures shared by the minister, the international price of petrol fell from $98.35 per barrel on June 22 to $91.68 per barrel on June 26, a decline of $6.67.
Diesel prices dropped from $109 to $104.79 per barrel over the same period, a decrease of $4.21.
Market data also showed benchmark crude prices posting sharp weekly losses, with Brent crude down $9.69 per barrel, West Texas Intermediate falling $8.53, and Arab Light crude dropping $4.14.
How much was Pakistan's petroleum levy increased?
According to official figures, the levy on high-speed diesel was raised by 6.57 rupees per litre to 79.54 rupees, while the levy on petrol increased by 0.39 rupees to 66.64 rupees per litre. The decline in global prices had fueled expectations of a cut in domestic fuel rates, but the government increased the levy instead, limiting the relief that could have reached consumers.
Malik said the government was not favoring any sector and remained committed to extending relief within the framework of broader economic and international commitments. He added that Prime Minister Shehbaz Sharif's government had cumulatively reduced diesel prices by 200 rupees per litre and petrol prices by 155 rupees per litre since taking office.
What are critics saying about the petroleum levy hike?
The decision has drawn criticism from consumers and market analysts, who argue that the sharp fall in global oil prices should have translated into lower fuel costs rather than higher tax collections. Government officials, however, say the pricing mechanism is aimed at balancing fiscal needs with consumer interests while ensuring compliance with broader economic commitments.
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