Key Takeaways
- Zulfikar Ahmed Bhutta and Hafiz Naeem-ur-Rehman have filed petitions against the petroleum levy.
- The Federal Constitutional Court has entertained both petitions.
- Petitioners seek to withdraw recent price hikes and examine the levy's constitutionality.
The Federal Constitutional Court (FCC) has been requested to fix a date for hearing two petitions challenging the imposition of a hefty petroleum levy and the recent increase in the prices of petroleum products in Pakistan.
Zulfikar Ahmed Bhutta, a prominent figure, has filed an application for early hearing of his petition, which he filed on May 1 this year. Bhutta, the Chief of Jamaat-e-Islami, has requested the FCC to direct the government to withdraw the recent hike in the prices of petroleum products.
In his plea, Bhutta contended that the federal government has failed to reduce petrol prices despite the normalization of oil prices. He further argued that the high fuel rates have led to increased prices of vegetables, food items, and public transportation fares.
Hafiz Naeem-ur-Rehman, the Chief of Jamaat-e-Islami, has also filed a petition. He has requested the FCC to issue directions for constituting an independent, expert-assisted mechanism or commission to examine the constitutional, fiscal, economic, and federal implications of the present petroleum levy structure.
The FCC Registrar’s Office did not raise any objection to either petition and allotted numbers to them. Both petitions have been filed under Article 175E of the Constitution.
The government announced a petroleum and carbon levy under an iron-clad commitment with the International Monetary Fund (IMF). However, the Petroleum Levy on both products has remained unchanged at Rs80 per litre each.
In the context of Pakistan, a petroleum levy is a federal tax imposed on petroleum products such as petrol (motor spirit), high-speed diesel (HSD), kerosene, and light diesel oil. It is one of the government’s most important non-tax revenue sources.
The petroleum levy is a fixed charge per litre that the government collects on fuel sales. Unlike sales tax, which is percentage-based, the petroleum levy is a specific amount per unit. It is imposed under federal laws such as the Petroleum Products (Petroleum Levy) Ordinance, 1961, and subsequent finance laws.
The federal government has the authority to adjust it through finance bills and statutory regulatory orders (SROs).
