Islamabad, November 10, 2025 – Pakistan’s federal government has generated over Rs10 billion in revenue under the newly introduced ‘carbon levy’ during the first quarter (July–September) of the fiscal year 2025-26, according to official data released by the Ministry of Finance.
The levy, officially titled the ‘Climate Support Levy’, was introduced through the Finance Act, 2025, following amendments to the Petroleum Products (Petroleum Levy) Ordinance, 1961. While the Finance Bill, 2025 initially proposed the term carbon levy, the final legislation renamed it as Climate Support Levy — though official finance ministry documents continue to refer to it as carbon levy.
As per the Finance Act, 2025, the levy imposes a charge of Rs2.50 per liter on motor spirit (petrol) and high-speed diesel for FY2025-26. This rate is set to increase to Rs5 per liter in FY2026-27. Similarly, furnace oil is subject to a Rs2.50 per liter (Rs2,665/MT) levy for FY2025-26, which will also double to Rs5 per liter next year.
The levy is applied in addition to the petroleum levy rates periodically notified by the federal government.
Analysts say the new measure supports Pakistan’s climate resilience and green energy transition agenda while boosting non-tax revenue amid fiscal challenges.
Officials added that the funds collected under the carbon levy will be utilized for environmental protection projects, renewable energy initiatives, and climate resilience programs nationwide.