Supreme Court Demands Explanation of High Petrol Prices in Pakistan

The Supreme Court was told on Thursday, that the actual price of petrol being charged is Rs. 62.38/liter and the rest of the amount, which is approximately Rs. 30/liter is taxes, with the current price of petrol at Rs. 91.96/liter.

A three-member bench headed by Chief Justice of Pakistan (CJP) Mian Saqib Nisar issued a directive after hearing the case about the excessive increase in petroleum prices.

Chief Justice Nisar asked,

Through which laws and formulas are taxes being imposed? The people are being driven towards insanity due to the heavy imposition of taxes.

PSO’s deputy managing director (DMD) Yaqoob Sattar also appeared before the Supreme Court and informed the court about the price mechanism of petroleum products, to which SC bench expressed disappointment over his briefing, as CJP expressed his suspicions and inquired the process of import of these petroleum products.

The SC bench summoned PSO’S MD to appear before the court on Friday along with Secretary Petroleum Ministry and FBR chairman to explain the mechanism of how taxation is implemented over the petroleum products.


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PSO’s deputy MD told the court that various institutions had defaulted a total amount of Rs. 300 billion. The chief justice inquired about these institutions and why weren’t they being held accountable. He also asked why these institutions had to loan money from banks and why they haven’t been returned by these defaulters.

Sattar informed the formula under which these taxes add up to become Rs. 91.96/liter from the actual Rs. 62.38/liter is that a Rs.9.85/liter tax was imposed on the commodity and inland freight equalization margin of Rs. 8.83/liter was also added to the price. The oil marketing companies were earning Rs. 2.55/liter and the dealers were making a commission of Rs. 3.35/liter.

The federal government imposed a 15 per cent tax on petrol in May, which was reduced to 12 percent in June. After adding up all these charges, the final price of petrol is Rs. 91.96/liter.

It was also discussed in the Apex court that the prices of petrol are the same in different cities as well, like Karachi and Peshawar. It was stressed that Karachi is a port city and should have less imposition of taxes because of the importance of transportation in a port city.

After which CJP observed that the oil and gas regulatory authority (OGRA) and Pakistan State Oil (PSO) are hiding something from SC and those issues should be brought in front of the court.

All those institutions found responsible for increasing petroleum prices will be held accountable.

Advocate Faisal Siddiqui was appointed to assist as the judicial assistant and Yaqoob Sattar and Federal Board of Revenue (FBR) Chairman Tariq Mahmood Pasha was summoned by the Supreme Court to come up with a well-justified report on Friday.

  • If anything taxes should be increased because fossil fuel consumption is bad for the environment and our economy. Oil imports make up 60% of our import bill. We are running a huge trade deficit which will force us to go begging to the IMF again very soon. Increasing taxes on petroleum products will discourage their consumption and save us precious foreign exchange.

    I sure hope the CJ doesn’t suspend taxes on petroleum products like he did with telecom taxes. It’ll sink the economy if he does this.

    • CJ seems to have political motives just like former CJ Iftikhar Chaudhry. He will don’t care for economy until funding to Supreme Court is reduced by Govt. Only then he will know how the Govt will live without earning.

    • Brilliant idea – now how will people travel? Is there an alternate energy fuel? Public transport? The OMCs and OGRA are all pocketing money and government taxing them for personal gain. Taxes should be collected from the rich and not the common man who is already burdened with inflation. I suggest discounted fuel rates for all taxpayers!

      • Bro how govt. will decide who is poor and who is not. Registered tax filers are half million and total number of cars are over 4 million. Motorcycles are over 15 millions. 1.5 million luxuries cars/jeeps/4 wheelers. Only trucks are half million. In this scenario i think only options are left to impose tax on fuel items and its common worldwide. i live in UK and fuel prices are almost doubled than in Pakistan.

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