Petroleum levy scrapped for a year? That is Rs 3,200 off a 40-litre tank

The government has offered to scrap the petroleum levy for one year, ARY News reported on Monday evening, citing sources in the negotiating team sent to talk to Jamaat-e-Islami. Prime Minister Shehbaz Sharif is expected to put the offer to the JI leadership himself.

Nothing has been notified yet. But the number attached to it is large enough that every motorcyclist and every car owner in the country should know what is on the table.

Rs 80 a litre, on petrol and on diesel

Petrol is Rs 389.14 a litre right now and high speed diesel is Rs 424.04, the rates set in the fortnightly review that took effect on 19 September. Inside each of those litres sits a petroleum levy of Rs 80, charged at the same rate on both fuels. A separate climate support levy of Rs 5 a litre sits on top of it.

So a one-year suspension, if the full amount were passed to the pump, points at petrol near Rs 309 and diesel near Rs 344.

What that does to a fill:

• A 40-litre car tank costs Rs 15,566 today. Without the levy it costs Rs 12,366, a saving of Rs 3,200 every time you fill up.
• A 10-litre motorcycle tank drops by Rs 800, from Rs 3,891 to Rs 3,091.
• A Suzuki Alto owner doing 1,000 km a month at 18 km per litre saves about Rs 4,440 a month.

Work out your own number on our fuel cost calculator, and the current pump rate is always on the petrol price page.

Diesel matters more than the headline suggests. Trucks, buses, tractors and tube wells run on it, so Rs 80 a litre off diesel feeds into freight rates, vegetable prices and the cost of moving wheat, which is why the JI demand has held public attention for three weeks.

The hole it leaves

The petroleum levy is the federal government's single most reliable tax. The FY2026-27 budget set a collection target of more than Rs 1.6 trillion from it, after Rs 1.567 trillion came in during FY2025-26. Suspending it for twelve months removes roughly that sum from the federal account in a year when the government is already short.

That is the reason no notification has followed the offer. The money has to be found somewhere, and the options on the table in earlier rounds were higher rates elsewhere, not lower spending.

Where the talks stand

Jamaat-e-Islami is running a "super long march" that moved from Rohri towards Multan on Monday. The party's position is that the levy must be abolished, not suspended for a year and then restored, and it says the march continues until that happens.

A one-year suspension is not abolition. Whether JI accepts it is the question the next 48 hours answer.

What to do now

Do not change your buying behaviour on a report from sources. Prices change only when the Finance Division issues a notification, and the next scheduled fortnightly review falls on 30 September for rates effective 1 October. If the levy is dropped before then, it would take a separate notification.

Keep the receipt habit: if the pump charges you the old rate after a cut is notified, that is an OGRA complaint, not a bad day.