Consumers may face higher fuel costs as the government is considering an increase in the climate support levy on petrol and high-speed diesel in the upcoming federal budget.

According to official sources, proposals under review suggest raising the climate support levy by Rs 2.5 per litre, which would increase the current rate from Rs 2.5 to Rs 5 per litre.

If approved, the move will directly impact retail fuel prices, potentially increasing transport and commodity costs across the country.

At present, both petrol and high-speed diesel are already subject to a climate support levy of Rs 2.5 per litre, introduced by the government during the current fiscal year under conditions agreed with the International Monetary Fund (IMF).

Officials say the levy was initially introduced as part of broader fiscal reforms aimed at improving revenue collection and addressing environmental and climate-related financing needs.

The proposed increase is now being discussed as part of the upcoming budget framework, where policymakers are evaluating multiple revenue measures to meet fiscal targets.

The potential adjustment comes at a time when inflation remains a concern for households and businesses, with any rise in fuel prices expected to have a cascading effect on transport fares and goods prices.

The final decision on the proposed levy increase will be taken during the budget approval process, and any changes will be announced by the federal government after cabinet approval.