The federal government has reduced the petroleum levy burden on consumers by Rs1.65 per litre under its revised petrol pricing formula, shifting a greater share of the levy to refineries.
According to details of the revised pricing mechanism, the petroleum levy burden attributed to consumers has been reduced from Rs65.29 to Rs63.64 per litre. The share borne by refineries has increased to Rs16.36 per litre, providing additional relief of Rs1.65 per litre to consumers under the revised formula.
The federal government continues to collect a total petroleum levy of Rs80 per litre, with Rs63.64 attributed to consumers and the remaining Rs16.36 borne by refineries.
The adjustment follows changes to the petrol pricing formula introduced by the government of Prime Minister Shehbaz Sharif approximately two weeks ago. The revised mechanism is intended to reduce the petroleum levy burden on consumers without changing the total levy collected by the federal government.
The move comes at a time when fuel prices remain a sensitive issue for households and businesses across the country, with transport costs feeding directly into the prices of essential goods. Any reduction in the levy burden on consumers is expected to ease pressure on household budgets, even though the overall levy collected by the government remains unchanged.
Officials say the revised formula redistributes the levy between consumers and refineries rather than cutting government revenue, keeping the total collection at Rs80 per litre while giving consumers a modest break at the pump.
The petroleum levy has been a subject of political debate in recent weeks, with opposition parties and religious groups calling for its reduction or abolition to provide relief to the public. The government has maintained that the levy is a key source of revenue, but has used adjustments to the pricing formula to pass on some relief where possible.
Petrol and diesel prices were also cut earlier in the day, with the government announcing a reduction in fuel prices alongside the levy adjustment, offering further relief to consumers facing high inflation.