Pakistan's FY2026-27 budget doubles the carbon levy to Rs5 per litre from July 2026, a move that analysts say will sustain inflation and weaken the rupee. KTrade Securities identifies gold traded on the Pakistan Mercantile Exchange as the clearest beneficiary, as higher fuel costs and currency pressure drive investors toward safe haven assets. The government targets Rs1.727 trillion in petroleum levy revenue, signaling continued reliance on fuel taxation. For carbon markets and climate finance watchers, the budget shows how carbon pricing interacts with commodity markets in a developing economy. The levy raises transport costs for agricultural goods like wheat and cotton, while gold imports become more expensive if the rupee depreciates. The abolition of capital value tax on foreign assets may encourage formal gold holdings, but higher indirect taxes could compress household demand for jewellery.
