Finance Minister’s Adviser Khurram Shehzad has defended the recent increase in the petroleum levy on high speed diesel, saying the adjustment represents a gradual return to the budgeted levy level rather than a new tax increase.
Shehzad made the remarks in a post on X while responding to a news report highlighting the second consecutive increase in the diesel levy.
He said the petroleum levy on diesel remains lower than it was before the Gulf crisis and was temporarily reduced to shield consumers from the sharp rise in international diesel prices. According to him, the move helped prevent the full impact of higher fuel prices from being passed on to transporters, farmers, and other diesel users.
The adviser noted that the revenue estimates approved by the National Assembly for the current fiscal year are based on an average petroleum levy of Rs. 80 per liter on both petrol and diesel. He said achieving those revenue targets is necessary to finance budgeted expenditures and maintain fiscal stability.
Shehzad added that as international oil prices decline, it is fiscally prudent to gradually restore the levy to its budgeted level instead of continuing what he described as an emergency reduction. He warned that any revenue shortfall would widen the fiscal deficit and impose greater costs on the economy.
He said the recent adjustments should be viewed as a phased normalization of a temporarily reduced levy rather than an arbitrary or unexpected tax increase.
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