Pakistan Moves to Criminalize Petroleum Levy Defaults with Up to 3 Years Jail
New bill in National Assembly proposes jail terms and mandatory audits for fuel companies that fail to remit petroleum levy or climate support levy, aiming to boost revenue collection under IMF commitments.
The Pakistani government has introduced a bill in the National Assembly that seeks to impose stringent penalties, including up to three years imprisonment, on oil companies, refineries, and other fuel licensees that fail to pay the petroleum levy or climate support levy. The Petroleum Products (Petroleum Levy and Climate Support Levy) (Amendment) Bill, 2026, was tabled by Minister for Parliamentary Affairs Tariq Fazal Chaudhary and has been referred to the relevant standing committee for review.
Under the proposed legislation, companies will be required to file monthly levy statements and an annual audited certificate, with the cost of the audit to be borne by the company itself. The bill does not alter the rates of either levy, meaning it will not directly affect petrol and diesel prices for consumers. Instead, it targets fuel companies to ensure that the levy amounts already collected at the pump are properly remitted to the national treasury.
The move comes as Pakistan prepares for a crucial International Monetary Fund (IMF) Executive Board meeting on its loan program. The government aims to collect Rs. 1.6 trillion from the petroleum levy in the fiscal year 2027, and tighter collection mechanisms are part of its commitments under the IMF program, which recently reached a staff-level agreement pending board approval.
The bill is seen as an effort to strengthen revenue collection amid fiscal pressures. By criminalizing non-payment and mandating audits, the government hopes to close loopholes that may allow companies to withhold levy funds. The legislation is now awaiting committee review before any further parliamentary process.
