Arif Habib Limited (AHL) has projected Pakistan’s petroleum development levy (PDL) collection at Rs 1.73 trillion for FY2027, indicating an expected increase of 17.8 percent compared to the previous year.

According to the outlook, achieving this target may require an increase in the combined levy on petrol (MS) and high-speed diesel (HSD) from the current level of around Rs 160 per litre to nearly Rs 180 per litre.

The analysis assumes that fuel demand will remain largely stable, as higher fuel prices could reduce consumption and potentially encourage a resurgence of fuel smuggling, particularly in border regions.

However, the report notes that upside risks could improve collections without significant tax hikes. These include stronger economic activity, lower global oil prices, improved domestic fuel demand, or tighter enforcement against smuggling networks.

In such a scenario, higher fuel volumes could help the government meet its revenue target while reducing pressure to raise per-litre levies.