Oil companies, refineries and other fuel licence holders could face up to three years in prison for failing to pay the petroleum levy and climate support levy under a new bill introduced in the National Assembly.

The Petroleum Products (Petroleum Levy and Climate Support Levy) (Amendment) Bill, 2026, was presented by Minister for Parliamentary Affairs Tariq Fazal Chaudhary and referred to the relevant standing committee for review.

The proposed changes aim to tighten levy collection and make fuel companies responsible for depositing the money they collect.

What the New Bill Proposes

Under the proposed law, payment of both levies would become a condition for holding an Oil and Gas Regulatory Authority (OGRA) licence.

Refineries would also have to deposit the applicable levies before fuel leaves their premises.

Companies that delay payments would face a daily surcharge calculated at 1.5 times the six-month KIBOR rate or 12 percent annually, whichever is higher.

OGRA would have the authority to suspend or cancel the licence of companies that fail to pay.

The bill also proposes up to three years in prison, a fine equal to the unpaid amount, or both for companies that fail to deposit the levies in full.

Directors and partners could also face liability unless they prove that the violation occurred without their knowledge or consent.

Fuel companies would additionally have to submit monthly levy statements and an annual audited certificate. They would be responsible for the audit costs.

Will Petrol and Diesel Prices Increase?

The proposed bill does not change the rates of the petroleum levy or climate support levy. It therefore does not directly increase or reduce petrol and diesel prices.

Instead, the changes target fuel companies and aim to ensure that levies collected through petroleum sales are deposited with the government.

The government is targeting Rs. 1.6 trillion in petroleum levy collection during FY2027. Stronger enforcement would help it meet this target and fulfil its commitments under the IMF programme.

The bill comes ahead of an important IMF Executive Board meeting on Pakistan’s loan programme, following a staff-level agreement on the fourth review.

If approved, the proposed changes would give the government stronger powers to recover unpaid levies and penalise companies that fail to deposit them.