The federal government has increased the Climate Support Levy (CSL) on petrol and high-speed diesel to Rs. 5 per litre, effective July 1, 2026, as part of the fiscal reforms introduced under the Finance Act 2026 and Pakistan’s commitments under the International Monetary Fund (IMF) programme.
According to an official notification, the Climate Support Levy has been doubled from Rs. 2.50 per litre to Rs. 5 per litre on both petrol and high-speed diesel.
To keep the overall tax burden on fuel largely unchanged, the government has simultaneously reduced the Petroleum Levy (PL). The Petroleum Levy on petrol has been lowered from Rs. 66.66 to Rs. 64.14 per litre, while the levy on high-speed diesel has been reduced from Rs. 79.97 to Rs. 70.04 per litre.
The revised levy structure replaces a portion of the existing Petroleum Levy with the Climate Support Levy instead of imposing an additional tax on consumers.
The Climate Support Levy was introduced through the Finance Act 2026 to generate dedicated funding for climate-related initiatives and support Pakistan’s environmental and fiscal reform agenda. The measure also aligns with commitments made under the country’s IMF-supported economic programme.
Despite the changes in the tax structure, retail prices of petrol and high-speed diesel remain unchanged, as the increase in the Climate Support Levy has been fully offset by the corresponding reduction in the Petroleum Levy.
