Pakistan collected Rs1.567 trillion in petroleum levy during the fiscal year 2025-26, surpassing the government’s budgeted target of Rs1.468 trillion by approximately Rs99 billion, according to data released by the Ministry of Finance.
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The higher petroleum levy collection contributed to the government achieving a stronger-than-targeted primary surplus during the fiscal year.
According to the Finance Ministry, Pakistan recorded a primary balance surplus of Rs3.634 trillion during FY2025-26, exceeding the target agreed under the International Monetary Fund (IMF) programme.
The ministry attributed the stronger primary balance to lower government expenditure and higher petroleum levy collection.
However, Pakistan still recorded an overall budget deficit of Rs4.763 trillion during the year. The government raised total borrowing of approximately Rs3.313 trillion during FY2025-26.
Of this amount, Rs2.135 trillion was raised from domestic sources, while net external financing amounted to approximately Rs1.113 trillion.
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Debt servicing continued to place significant pressure on government finances, with the government spending Rs6.947 trillion on interest payments during the fiscal year.
Domestic debt accounted for Rs6.040 trillion of the interest payments, while another Rs917 billion was paid on external debt.
The provinces received a combined Rs7.668 trillion under the National Finance Commission (NFC) Award during FY2025-26, compared with Rs6.854 trillion in the previous fiscal year.
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Punjab received the largest share at Rs3.370 trillion, followed by Sindh with Rs1.897 trillion, Khyber Pakhtunkhwa with Rs1.240 trillion, and Balochistan with Rs736 billion. All four provinces reported budget surpluses during the fiscal year.
Punjab recorded the largest provincial surplus at Rs914 billion, followed by Sindh with Rs349 billion, Khyber Pakhtunkhwa with Rs164 billion and Balochistan with Rs20 billion.
Defence spending reaches Rs2.587 trillion
The Finance Ministry reported that defence expenditure stood at Rs2.587 trillion during FY2025-26.
Other major expenditure components included Rs1.001 trillion in pension spending and Rs1.013 trillion in subsidies.
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The central bank’s profit during the fiscal year stood at Rs2.428 trillion. Overall government expenditure reached Rs23.087 trillion during FY2025-26, equivalent to 18.2% of GDP.
The ratio was lower than the 21.4% recorded in FY2024-25 and 19.5% in FY2023-24, according to the Ministry of Finance.
The government is expected to present these fiscal indicators to the IMF during the fifth economic review scheduled for next month.
The higher petroleum levy collection is likely to remain an important component of discussions with the lender as Pakistan continues implementing fiscal measures under its IMF programme.
