The Oil Companies Advisory Council (OCAC) has warned that new petroleum and climate support levies on furnace oil will increase its price by over 80 percent, making its use unviable for key industries, shipping companies, and power producers.
OCAC Chairman Adil Khattak, in a letter, highlighted industry-wide concern over the imposition of a petroleum levy of Rs. 82,077 per metric ton and a Climate Support Levy of Rs. 2,665 per ton through the Finance Act 2025. OCAC said the combined impact would severely disrupt industrial operations and increase energy costs.
Furnace oil is a deregulated product used by sectors such as cement, textile, glass, tyre manufacturing, foundries, and shipping. OCAC warned that the drastic price hike would collapse domestic demand, leading to shutdowns in sectors that lack alternative fuels.
OCAC cautioned that if local demand disappears, refineries will be forced to export furnace oil at a loss. And even worse, the government would still have to pay capacity charges.
The council said the levies contradict the government’s commitment to industrial growth and would likely reduce overall tax collection. It recommended immediate withdrawal of the new levies to prevent damage to industrial output, refinery operations, and power generation.
