From July 1, 2025, a carbon levy of Rs2.50 per litre will be imposed on petroleum products, the Petroleum Division informed the National Assembly’s Standing Committee on Finance. The petroleum levy currently stands at Rs77/litre on high-speed diesel and Rs78.02/litre on petrol, with a cap of Rs90/litre proposed. Furnace oil, although phased out from public plants, is still used by IPPs and may also face a Rs77/litre levy.
To tackle power sector debt, the government plans to borrow Rs1.275 trillion from commercial banks at 0.9% below the three-month KIBOR, targeting full repayment within six years. Lifeline electricity consumers will remain exempt from the Rs3.23/unit surcharge.
The Committee approved several key legislative amendments, including those to the Petroleum Levy Ordinance and the Electric Power Act. However, it raised objections over new levies on Electric Vehicles (EVs), noting the lack of infrastructure and strategy. A proposed 1–3% tax on new car buyers to finance EV subsidies drew criticism for not being part of the Finance Bill 2025-26.
The Committee deferred decisions on solar taxation, hybrid vehicle policy, EV planning, and certain sales tax and stamp act amendments, demanding more clarity and actionable frameworks from the ministries involved.
