Diesel levy hike is phased normalization, not arbitrary tax rise: Khurram Schehzad

August 07, 2026 (MLN): The recent increase in the Petroleum Levy (PL) on diesel represents a phased normalization of a temporarily reduced levy rather than an arbitrary tax hike, with the rate still lower today than it was before the Gulf crisis despite the latest adjustment.

The clarification came from Khurram Schehzad, Advisor to the finance minister, responding to criticism over back-to-back increases in the diesel levy on X (formally twitter).

He noted that the PL had been temporarily reduced to shield consumers from the sharp rise in international diesel prices in recent months, ensuring the full burden was not passed on to transporters, farmers, and other diesel users.

Khurram Schehzad said the revenue estimates for the current fiscal year, duly approved by the National Assembly, are based on an average PL rate of Rs80 per litre on both diesel and petrol, and that meeting these targets is essential to finance budgeted expenditures and maintain fiscal stability.

As international oil prices ease, he said, it is both prudent and fiscally responsible to gradually restore the levy toward its budgeted level rather than continue an emergency reduction indefinitely, adding that a revenue shortfall would widen the fiscal deficit and ultimately impose greater costs on the economy and the public.

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