Finance Minister’s Adviser Khurram Shehzad has defended the government’s latest increase in the petroleum levy on high speed diesel (HSD), saying it is a gradual restoration of the budgeted levy rather than the introduction of a new tax.

In a post on X, Shehzad responded to reports highlighting the second consecutive increase in the diesel levy, arguing that the adjustment reverses a temporary reduction introduced when global oil prices surged.

He said the levy on diesel remains below the level in place before the Gulf crisis, adding that the earlier reduction was intended to cushion transporters, farmers, and other diesel consumers from the sharp rise in international fuel prices.

According to Shehzad, the federal budget approved by the National Assembly is based on an average petroleum levy of Rs. 80 per litre on both petrol and diesel. He said meeting that target is essential to fund budgeted expenditures and maintain fiscal discipline.

The adviser added that with international oil prices easing, restoring the levy to its budgeted level is a fiscally responsible step instead of continuing what he described as a temporary emergency relief measure.

He warned that keeping the levy below the budgeted level would reduce government revenues, widen the fiscal deficit, and increase pressure on the economy.

Shehzad said the recent increase should be viewed as a phased return to the approved levy level rather than an arbitrary or unexpected tax hike.