Islamabad: Consumers may face higher fuel prices in the upcoming fiscal year as the government is planning to increase the carbon levy on petroleum products under the federal budget 2026-27, according to sources involved in the budget-making process.
Under the proposed plan, the carbon levy is expected to be raised from Rs2.50 per litre to Rs5 per litre, effective from July 1, 2026.
Officials said the current fiscal year already includes a carbon levy of Rs2.50 per litre on petroleum products, and the upcoming budget aims to implement the full approved rate of Rs5 per litre.
The proposed increase is expected to generate additional revenue for the government while also supporting broader climate-related policy commitments.
Sources added that the revised levy had already been outlined in earlier budget plans, and its full implementation is now being prepared for the next financial year.
If approved, the increase will directly impact petroleum product prices, potentially raising transportation and overall energy costs for consumers across the country.
The proposal is likely to be formally announced in the federal budget for FY2026-27.
