The federal government of Pakistan is expected to raise the Petroleum Development Levy (PDL) to over Rs100 per liter in the upcoming budget, in line with conditions set by the International Monetary Fund (IMF).
An IMF delegation is currently in Islamabad to finalize details of the next federal budget. According to The News, citing official sources, the proposed increase in PDL is aimed at bolstering non-tax revenue to fund power and electric vehicle subsidies and to curb the mounting circular debt.
At present, Pakistani consumers are paying Rs78 per liter in PDL on petrol and Rs77 on diesel. The planned hike is part of a broader strategy under the IMF’s Extended Fund Facility (EFF) to improve Pakistan’s fiscal outlook through enhanced revenue collection.
Since July 2024, the PDL has already seen a substantial rise—from Rs60 to Rs80 per liter—resulting in over Rs1 trillion in collections during the first ten months of the ongoing fiscal year. The government has set a year-end target of Rs1.281 trillion in revenue from the levy.
Moreover, as part of its climate-oriented fiscal framework, the government has committed to introducing a Rs5 per liter carbon levy on both petrol and diesel.
In the energy sector, the government will remove the existing 10 percent cap on the Debt Service Surcharge (DSS) on electricity bills by June 2025, a measure intended to help rein in the ballooning circular debt.
