Government Rejects JI Demand to Scrap Petroleum Levy, Offers Fuel Relief Instead

The government has turned down a demand by Jamaat-e-Islami (JI) to abolish the petroleum levy, even as it agreed to provide fuel cost relief to the agriculture sector, public transport, and certain categories of vehicles, JI said on Tuesday following the latest round of negotiations.

Acting JI Emir Liaquat Baloch told a press conference after meeting Deputy Prime Minister and Foreign Minister Ishaq Dar that talks on removing the levy had reached their final stage. He claimed the government acknowledged the validity of JI's demands, which were backed by a nationwide protest campaign and a six-point proposal.

Baloch said the government would complete work on oil refinery profits and a gradual elimination of the petroleum levy on Monday, with a working paper to be prepared on Tuesday. JI Emir Hafiz Naeem ur Rehman will announce the party's next move after reviewing the final draft agreement.

However, the government's position was less definitive. The Foreign Office said both sides held candid discussions on relief for low-income citizens affected by rising energy costs and agreed to continue talks in the coming days, but did not confirm any agreement to remove the levy. Government negotiators reportedly told JI that fuel prices are linked to international oil rates, which are rising, and that all possible relief had already been extended.

No change at the pump has been announced yet. Petrol and diesel prices remain unchanged until a final deal is signed and notified. If the reported relief materialises, farmers, transporters, and some vehicle owners would be the first to benefit. A full or gradual end to the levy would represent a larger shift, but the government relies heavily on the levy and aims to collect Rs. 1.6 trillion from it in FY27.