Pakistan's federal government is considering a proposal to double the carbon levy on petroleum products from Rs 2.50 per litre to Rs 5 per litre, effective July 1, 2026. The move is part of the upcoming FY2026-27 budget and aims to boost revenue while supporting climate policy commitments. The full levy amount was already provisioned in the current fiscal year's budget, and the government now plans to implement it. The increase could raise fuel prices for consumers, depending on international oil prices and exchange rate movements. Analysts warn that higher petroleum taxes impact transportation costs, inflation, and household expenses. The proposal is expected to be formally announced during the Federal Budget 2026-27 presentation.
