ISLAMABAD – As Pakistanis are paying nearly Rs300 per litre for petrol and over Rs309 per litre for high-speed diesel, the actual cost of these fuels is far lower, with government taxes and levies making up a significant portion of the final price.
The latest petroleum pricing structure, effective from July 4, 2026, shows that although the government recently announced a slight reduction in fuel prices, it simultaneously increased the Climate Support Levy, keeping the overall tax burden on consumers largely intact.
Petrol
Petrol is currently retailing at Rs297.53 per litre, despite its ex-refinery price standing at just Rs179.47 per litre.
The remaining amount is made up of government levies, duties and distribution costs. Consumers pay Rs70.36 per litre in Petroleum Levy, Rs8.64 in Petroleum Development Levy, and Rs5 under the Climate Support Levy. Additional charges include Rs19.33 in customs duty and freight, Rs6.86 as the oil marketing companies’ margin, and Rs7.87 as the dealers’ margin.
| Component | Petrol | Diesel | Kerosene | Light Diesel |
|---|---|---|---|---|
| Ex-Refinery Price | 179.47 | 199.06 | 200.91 | 172.67 |
| Petroleum Levy (PL) | 70.36 | — | 20.36 | 15.84 |
| Petroleum Development Levy (PDL) | 8.64 | 70.82 | — | — |
| Climate Support Levy | 5.00 | 5.00 | — | — |
| Customs Duty | — | 15.68 | — | — |
| Customs Duty/Freight Margin | 19.33 | — | — | — |
| Freight Margin | — | 2.43 | 8.29 | 5.36 |
| Oil Marketing Companies’ Margin | 6.86 | 7.87 | 1.58 | 1.61 |
| Dealers’ Margin | 7.87 | 8.64 | — | — |
| GST | 0 | 0 | 0 | 0 |
| Total Government Tax/Levies* | 94.69 | 91.56 | 20.36 | 15.84 |
| Retail Price | 297.53 | 309.50 | 231.14 | 195.42 |
| Tax Share of Retail Price | 32% | 30% | 9% | 8% |
Although General Sales Tax (GST) on petrol remains zero, the government still collects Rs94.69 per litre in taxes and levies—around 32% of the pump price.
Diesel
High-speed diesel is currently being sold at Rs309.50 per litre, while its ex-refinery price is Rs199.06 per litre.
The price includes Rs70.82 in Petroleum Development Levy and Rs5 as Climate Support Levy, along with Rs15.68 in customs duty, Rs2.43 in freight charges, Rs7.87 as the oil companies’ margin and Rs8.64 for dealers.
With GST also fixed at zero, the government still receives Rs91.56 per litre in taxes and levies, representing nearly 30% of the retail price.
Kerosene and Light Diesel
Kerosene oil, widely used by households for cooking and heating in many parts of the country, is priced at Rs231.14 per litre, compared with an ex-refinery price of Rs200.91.
Its retail price includes Rs20.36 in Petroleum Levy, Rs8.29 in freight charges and Rs1.58 as the oil companies’ margin. The total tax on kerosene stands at Rs20.36 per litre, or around 9% of its retail price, while GST remains zero.
Light diesel oil is retailing at Rs195.42 per litre, against an ex-refinery price of Rs172.67. Consumers pay Rs15.84 in Petroleum Levy, along with Rs5.36 in freight charges and Rs1.61 as the oil companies’ margin.
Overall, the government collects Rs15.84 per litre in taxes on light diesel, accounting for roughly 8% of the pump price.
Despite the absence of GST on all four petroleum products, multiple levies, duties and fixed margins continue to keep retail prices significantly above ex-refinery rates, making fuel taxation one of the government’s largest revenue streams while adding to the financial burden on consumers already grappling with rising living costs.
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