Government Imposes Rs80 Per Litre Federal Excise Duty on White Spirit and Mineral Turpentine Oil

Islamabad: Finance Minister Muhammad Aurangzeb announced that the federal government has imposed a Federal Excise Duty (FED) of Rs80 per litre on white spirit and mineral turpentine oil as part of the Budget 2026-27.

Addressing the National Assembly during the budget speech, the finance minister said these products fall outside the Petroleum Development Levy regime and are commonly used for adulteration in fuel products. He noted that such practices cause damage to millions of vehicles and machinery every year.

The minister also proposed the abolition of Federal Excise Duty on business-class international air travel, aiming to provide relief to frequent business travelers.

Aurangzeb said that a new automotive sector policy is currently under review by a committee formed by the prime minister. The policy will be presented to Parliament after approval from the cabinet and the prime minister.

He further stated that existing incentives for electric motorcycles, rickshaws, cars, and buses will continue in the next fiscal year. A proposal has also been made to extend a 1 percent sales tax facility on imported electric trucks.

In addition, the government has decided to fully remove customs duties on more than 100 raw materials used in the local production of medicines for cancer and other diseases. According to the minister, this step will reduce input costs and provide relief to the export sector, chemical industry, and small businesses.