The federal government collected a record Rs. 1.567 trillion in petroleum levy during fiscal year 2025-26, setting a new annual high and exceeding its budget target, according to the Ministry of Finance’s fiscal operations report.

Petroleum levy receipts increased 29 percent from Rs. 1.22 trillion in the previous fiscal year, beating the original budget estimate of Rs. 1.468 trillion and the revised target of Rs. 1.498 trillion.

The reported collection does not include revenue generated through customs duty on petroleum products or the Rs. 26 billion collected under the carbon levy. For FY27, the government has budgeted Rs. 1.676 trillion in petroleum levy receipts, in addition to Rs. 50 billion expected from a climate levy on petroleum products.

The report also showed that expenditure on the civilian government rose 16 percent to a record Rs. 1.033 trillion in FY26, crossing the Rs. 1 trillion mark for the first time despite the government’s stated restructuring and austerity measures. The spending exceeded the budget allocation of Rs. 971 billion, up from Rs. 892 billion a year earlier.

Defence spending increased 18 percent year-on-year to Rs. 2.588 trillion, compared with Rs. 2.194 trillion in FY25. The final amount was only Rs. 38 billion above the approved budget of Rs. 2.55 trillion.

Pakistan’s fiscal deficit narrowed to 2.6 percent of GDP, the lowest level in more than two decades, supported by higher provincial cash surpluses and lower debt servicing costs. The country’s primary surplus reached a record 2.9 percent of GDP during the fiscal year.

Meanwhile, total government revenue stood at 15.6 percent of GDP, marginally lower than 15.7 percent recorded a year earlier. The Federal Board of Revenue (FBR) collected Rs. 13.01 trillion in taxes during FY26, an increase of nearly 11 percent over the previous year, although collections remained around 10 percent below the annual target.