Levies, surcharges and royalties – protests ...

Summary

• There are also ten other Levies, Surcharges and Royalties, such as Natural Gas Development Surcharge, Royalty on Oil and Gas, Discount on Local Crude Oil, Windfall Levy on Crude Oil & Natural Gas, Gas Infrastructure Development Cess, Petroleum Levy on Liquefied Petroleum Gas (LPG), Windfall Levy on Gas, Off-the-Grid (Captive Power Plants) Levy, and Climate Support Levy.
• The Petroleum Exploration and Production Policy 2012, approved by the Ministry of Petroleum & Natural Resources, Government of Pakistan, imposes royalty on exploration and production of oil and gas.
• Windfall Levy on Crude Oil & Natural Gas: As per the Petroleum Exploration & Production Policy 2012, Windfall Levy will be applicable on crude oil and condensate using the formula, i.e.

AI Generated Summary

For the last more than six weeks, levies, surcharges and royalties have been the talk of the town. A political party has been organising country-wide protest meetings, sit-ins (dharnas) and also threatening to launch a long march if the Petroleum Levy is not withdrawn in order to minimise the financial burden on the people at large. As per the latest developments, the political party leadership, on a request from Prime Minister Muhammad Shehbaz Sharif, had postponed its long march plans till early October, thereby allowing the PM to come up with some more major relief plans/initiatives.

Petroleum Levy is not just one levy, as a matter of fact. There are also ten other Levies, Surcharges and Royalties, such as Natural Gas Development Surcharge, Royalty on Oil and Gas, Discount on Local Crude Oil, Windfall Levy on Crude Oil & Natural Gas, Gas Infrastructure Development Cess, Petroleum Levy on Liquefied Petroleum Gas (LPG), Windfall Levy on Gas, Off-the-Grid (Captive Power Plants) Levy, and Climate Support Levy.

According to the information available from the official documents, these levies, surcharges and royalties pertaining to the Oil and Gas Sector are one of the major sources of revenue generation for the Federal Government. The Federal Government had anticipated receipts on this account of Rs. 1,887,682.000 million during the financial year 2025-26. Against this, the receipts accounted for somewhat lower figures of Rs. 1,790,296.000 million as per revised figures for the last fiscal year. It may also be mentioned here that the Federal Government had received Rs. 48,000.000 million on account of the Climate Support Levy, which was introduced during the last financial year. The Federal Government has anticipated revenue of Rs. 1,997,893.000 million during the current financial year 2026-27 as receipts from the Oil and Gas Sector.

A brief introduction of these Levies, Development Surcharges and Royalties on Oil and Gas is given below for the kind information of all those directly or indirectly concerned and affected, as well as the people at large, who should know what the revenue generation sources of the Federal Government were.

Petroleum Levy: The Petroleum Products (Petroleum Levy) Ordinance 1961, amended from time to time, provides for the imposition of Petroleum Levy. The ex-refinery/import price of oil is added with Inland Freight Equalization Margin, Oil Marketing Companies’ distribution margin and dealers’ commission as fixed by the Government of Pakistan in rupees per litre. On this accumulated price of oil, Petroleum Levy is fixed by the Government of Pakistan in rupees per litre from time to time.