The Sharif government of Pakistan has shifted the cycle of petroleum price hikes from 15 days to a weekly basis, and on this Friday, April 24, they imposed a self-serving increase of 26 rupees per liter on petrol and diesel.
Even though the trend in the global market remained downward throughout the week, due to certain statements by the US President and tensions at the Strait of Hormuz during Thursday and Friday, the price touched $106 per barrel. Taking full advantage of this brief spike, the Sharif government dealt a “noble” blow of 26 rupees per liter to the resilient public.
This clearly indicates that the Sharif government has turned war into a tool for plunder. The petroleum levy has been increased by 26.77 rupees per liter, bringing the total petroleum levy rate to 107.38 rupees per liter.
What exactly is this labyrinth of petroleum pricing?
Petroleum prices in Pakistan are now linked to the global market, but the “formula” isn’t limited to just the price of crude oil. Whenever prices rise globally, an immediate effort is made to pass the impact onto the public, leading to severe public grievances.
1. What is the logic behind the “immediate hike” and the time it takes for petrol to reach Pakistan?
The process of purchasing petroleum products from the international market and delivering them to consumers in Pakistan usually takes 25 to 40 days. This includes sea transit, off-loading at the port, and access to refineries or storage.
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Aladdin’s Lamp or Price Fixing? Prices in Pakistan are not determined based on “Historical Cost” but on “Replacement Cost” (the expected future price). The government’s argument is that if expensive petrol is to be bought today, enough money must be collected by selling the current stock to afford the next shipment.
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Hikes on Stored Petrol: When the government raises prices, it also applies to the stored (inventory) petrol. This provides “Inventory Gains” to companies and the government, which the public considers a blatant economic injustice.
2. What is the Petroleum Levy and Government Revenue?
The Petroleum Development Levy (PDL) has become the easiest way for the government to collect revenue. According to the government’s stance, the recent hike was aimed at meeting IMF targets.
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Economic Murder or Necessity? According to economic experts, when the government fails to collect direct taxes, it imposes indirect taxes (levy) on essential items like petrol. This burden falls equally on the poor and the rich, which is a violation of social justice.
3. The Price Determination Formula
The price of petrol in Pakistan consists of the following components:
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Ex-Refinery Price: The cost of crude oil plus refining charges.
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IFEM (Inland Freight Equalization Margin): Transportation costs to keep prices uniform across the country.
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Distributor & Margin: Profit margins for petrol pumps and oil companies.
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Petroleum Levy: The government’s direct tax.
4. The Contrast of Government Perks and Austerity: “The Simple Fraud of Simplicity”
The public’s question is valid: while the burden is placed on the masses, the elite and the bureaucracy are provided with free petrol.
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Parliamentary Salaries: The extraordinary increase in the salaries and perks of parliamentarians remains a huge question mark over the “Austerity Campaign.” When the public is asked to sacrifice during an economic crisis, the lack of a similar sacrifice from the ruling class creates social unrest.
You will be surprised to know that in terms of annual income, only two countries in the world are more expensive than Pakistan, and two are close.
Simply looking at the petrol price is not enough; it is essential to see what percentage of a common citizen’s income is spent on petrol. In terms of Purchasing Power Parity (PPP), the price of petrol in Pakistan is among the highest in the world.
| Country | Status (Relative to Income) | Reason |
| Burundi / Central Africa | More expensive than Pakistan | Extremely low per capita income and import difficulties |
| Malawi | More expensive than Pakistan | Currency devaluation and logistic costs |
| Afghanistan | Close to Pakistan | Unstable economy and transport issues |
| Sri Lanka | Close to Pakistan (Higher during previous crisis) | Sharp increase following bankruptcy |
Although the price of petrol in Europe (e.g., Norway or Germany) is higher than in Pakistan, the average income there is 20 times higher than that of a Pakistani citizen; therefore, a citizen there can buy petrol more easily. Pakistan is currently among the top countries in the world facing a “Cost of Living Crisis.”
The hike in petrol prices in Pakistan is not just due to the global market, but a result of the devaluation of the rupee and the government’s shortcut to tax collection (levy). As long as the “free petrol” for the privileged class does not end and the tax system does not become fair, this burden on the public will continue to grow.
When the dark night of oppression grows long, silence becomes a sin! O dwellers of this pure land, just consider how those ruling over you are hell-bent on squeezing the last drop of blood from your veins. Just yesterday, when global prices were falling and the world was breathing a sigh of relief, those deciding your fate were planning a robbery on your pockets. Using a few hours of maritime movement and a statement from a president in a far-off land as a shield, the poison of inflation was dissolved into your lives—an example of which is hard to find.
Have you ever wondered why the burden of petrol that has not even entered Pakistan’s borders yet, which is still floating on the ocean waves, was placed on your shoulders today? What kind of Aladdin’s lamp is this that brings the surge of the global market to your petrol pumps in a single day, but when prices fall, this lamp goes out? This is not economic logic; this is sheer plunder! Your hard-earned money is being devoured in the name of a ‘levy’ so that the lamps of royal palaces keep burning, so that the wheels of the bureaucracy’s vehicles keep turning on free petrol, while you… you sacrifice the happiness of your children just to put a few liters of petrol in your motorcycle tank.
The limit is that those staging the drama of simplicity increase their own salaries by five hundred percent, but to extinguish the fire of a poor man’s stove, they have nothing but the whip of taxes. Today, in terms of GDP and average income, Pakistan has been stood in the line of countries where living has become a crime. The countries more expensive than us are those that are war-torn or famine-stricken; so, are we also in the grip of an unseen war? Yes! This is a war the elite have waged against the poor.
The day you recognize your power, the day you lift your bowed heads and look the oppressor in the eye and ask “Why?”, that very day this exploitative system will prove to be a wall of sand. Make your voice an echo that makes the walls of the palaces tremble, because raising a question is the first step toward revolution. Learn to fight for your rights, otherwise, history will remember you only as an oppressed mob, not as a living nation. Now is the time for the silence to break and for the sun of truth to rise!
