The government has increased levy on petrol by Rs4.65 per litre and on diesel by 80 paisa per litre, effectively depriving the public of full relief of falling fuel prices.

According to a notification issued on January 15 by the Petroleum Division, the levy on petrol has been increased from Rs79.62 to Rs84.27 per litre, while the levy on diesel has been raised from Rs75.41 to Rs76.21 per litre.

The petroleum levy on kerosene oil has been increased by Rs1.41 per litre, raising it from Rs18.95 to Rs20.36 per litre. The levy on light diesel oil has been fixed at Rs15.84 per litre.

The petroleum levy is a government-imposed tax on petroleum products such as petrol, high-speed diesel, kerosene, and furnace oil. It is charged per litre and is collected by the federal government under the Petroleum Levy Ordinance, 1961.

The levy is not a sales tax; it is a fixed charge per litre, which the government can increase or decrease through notifications.

Whatever the government collects through the petroleum levy goes directly to the federal exchequer, unlike sales tax which is shared with provinces.

The petroleum levy is a major source of revenue, especially when the government wants to avoid increasing general taxes.