KARACHI: Sindh Government Spokesperson Sukhdev Hemnani has called upon the Federal Government to finalise and notify the Auto Policy 2026–31 and provide a clear transitional framework for hybrid, plug-in hybrid and electric vehicles following the expiry of the previous policy.
Hemnani said the Auto Industry Development and Export Policy 2021–26 expired on 30 June 2026. On the same date, the statutory concessional sales-tax treatment of 8.5% for qualifying locally manufactured hybrid vehicles up to 1,800cc and 12.75% for those between 1,801cc and 2,500cc also ended. Consequently, affected hybrid models falling within the relevant federal tax categories became subject to 25% sales tax.
He said both deadlines were known well in advance. While the Federal Government was entitled to review or revise any fiscal incentive, its decision should have been incorporated into a complete successor framework before the previous arrangements expired.
“Industrial policy requires continuity and predictability. The issue is not whether a concession may ever be revised, but whether a known transition was managed through timely decisions, clear eligibility criteria and adequate notice to consumers and investors,” Hemnani said.
He clarified that he was not advocating permanent or indiscriminate preferential taxation for all hybrid vehicles. Any transitional support should be time-bound and linked to measurable fuel efficiency, local manufacturing, localisation, technology transfer, employment and domestic component development.
Hemnani said Pakistan’s petroleum-import dependence made coordination between taxation, industrial policy and clean-mobility planning particularly important. Pakistan spent approximately US$11.2 billion importing crude oil and petroleum products during FY2024–25, while transport accounted for approximately 82.5% of petroleum-product demand during July–March FY2026.
He said full electrification remained the long-term objective, but the transition must take account of charging infrastructure, grid capacity, consumer affordability and local manufacturing capability. Hybrid vehicles could provide interim fuel-efficiency gains, while the benefits of plug-in hybrids depended upon regular charging and actual use in electric mode.
Referring to the Climate Support Levy, Hemnani noted that it had increased from Rs2.50 to Rs5 per litre on petrol and high-speed diesel for FY2026–27, with the federal budget estimating Rs50 billion in receipts. He clarified that his concern related specifically to transparency and policy consistency regarding the Climate Support Levy, rather than demands for abolition of the broader petroleum levy.
“If a levy is collected under the designation of climate support, the public should be informed about actual collections, the allocation and accounting framework, and the measurable climate outcomes associated with the Government’s wider expenditure programme,” he said.
Hemnani acknowledged that automobile taxation and the national auto policy fall within federal jurisdiction, but said their consequences extend to consumers, workers, manufacturers, vendors, ports, logistics networks and investment activity in Sindh, as well as the province’s environmental and economic interests.
He urged the Federal Government to notify the new auto policy without further delay, publish clear tax and eligibility criteria for different vehicle technologies, provide orderly transitional arrangements for affected consumers and businesses, and ensure meaningful consultation with provincial governments and relevant stakeholders.
“Pakistan requires a coordinated automobile policy that promotes local industrial development, improves fuel efficiency, reduces imported-fuel vulnerability and provides a commercially realistic pathway towards cleaner transport,” Hemnani concluded.
