Pakistan's petroleum levy collection exceeds target by PKR 99 billion

Pakistan collected PKR 1.567 trillion in petroleum levy in the fiscal year ended June 30, exceeding its target by PKR 99 billion.

Finance Ministry documents showed the higher collection helped the government achieve a primary surplus in line with a key commitment under its International Monetary Fund program.

How much petroleum levy did Pakistan collect in FY2025-26?

Pakistan's petroleum levy collection reached PKR 1.567 trillion in fiscal year 2025-26, against a government target of PKR 1.468 trillion. This left a surplus of PKR 99 billion over target. The higher-than-target levy, combined with spending restraint, contributed to a primary surplus of PKR 3.634 trillion for the year.

Pakistan recorded an overall budget deficit of PKR 4.763 trillion during the year, while total tax and non-tax revenues stood at PKR 19.773 trillion. Total government expenditure fell to PKR 23.087 trillion, equivalent to 18.2% of gross domestic product, down from 21.4% of GDP in fiscal 2024-25 and 19.5% in fiscal 2023-24.

What did Pakistan spend the most on in FY2025-26?

Debt servicing remained the largest expenditure item, with the government spending PKR 6.947 trillion on interest payments. Of this, PKR 6.04 trillion went towards domestic debt and PKR 917 billion towards external debt. The government also spent PKR 2.587 trillion on defense, PKR 1.001 trillion on pensions and PKR 1.013 trillion on subsidies during the year.

The government borrowed a net PKR 3.313 trillion during the year, including PKR 2.135 trillion from domestic sources. Net external financing amounted to PKR 1.113 trillion, according to the Finance Ministry. The central bank generated a profit of PKR 2.428 trillion during the same period.

How much did the provinces receive from the federal government?

The federal government transferred PKR 7.668 trillion to the provinces under the National Finance Commission award during fiscal 2025-26, up from PKR 6.854 trillion a year earlier. Punjab received the largest share at PKR 3.370 trillion, followed by Sindh with PKR 1.897 trillion, Khyber Pakhtunkhwa with PKR 1.024 trillion and Balochistan with PKR 736 billion.

The provinces also recorded a combined fiscal surplus. Punjab posted a surplus of PKR 914 billion, Sindh PKR 349 billion, Khyber Pakhtunkhwa PKR 164 billion and Balochistan PKR 20 billion, according to the documents.

Why does the petroleum levy matter for Pakistan's IMF program?

The Finance Ministry is expected to present these fiscal indicators to an IMF delegation during the fifth review of Pakistan's economic program next month.

The figures highlight the role of higher petroleum levy revenues and spending restraint in helping Pakistan meet its primary balance commitment under the IMF-supported program.