Miftah says govt petrol hike benefits oil firms

Former minister says govt prioritizes corporate interests again

ISLAMABAD: Former finance minister Miftah Ismail has slammed the PML-N-led government’s move to hike the price of petrol and diesel, saying that it has only benefited oil firms.

In a post on X, Miftah, who served as the finance czar during Prime Minister Shehbaz Sharif’s previous tenure, said that the government raised the prices, but in doing so, it also gave Rs35 per litre extra profit to oil companies on petrol and Rs70 per litre on diesel.

The federal government raised petrol and diesel prices by Rs55 per litre as surging global oil prices, fuelled by the US‑Israel war with Iran, put pressure on domestic energy costs.

Effective from March 6, the new price of petrol is Rs321.17 per litre from Rs266.17; whereas, the diesel rate is Rs335.86 per litre from Rs280.86 after the review.

Explaining it further, the Awam Pakistan Party (APP) leader said that the government decided to increase petrol and diesel prices by Rs55 per litre each, which is both the highest single increase ever and the highest price level for both petrol and diesel. “And it will, of course, bring in a huge increase in inflation.”

Miftah said that in Pakistan, petrol and diesel prices are set every 15 days. The last price increase came on February 28 for the period of March 1-15, which is set according to the prices in Singapore’s Platt index.

The government, he explained, took the average Platt price for petrol and diesel from February 15-28 and added petroleum levy and other incidentals and came up with a price.

“It does it because the inventory cost of petrol and diesel in Pakistan sold by oil companies in the first fortnight of March is based on international prices that existed before Feb 28 when companies bought the products from international markets.”

“The government felt compelled to increase prices now to stave off a shortage,” he stressed.

The other option, Miftah said, would have been to credibly announce that they would reduce the petroleum levy from March 15 onwards so that the final consumer price would not increase.

This would also have staved off hoarding, but fiscal prudence and the International Monetary Fund (IMF) wouldn’t have allowed this.

“A final option would have been better monitoring of oil companies and petrol pumps, but the government doesn’t have faith in its own monitoring apparatus. So the government decided to raise prices.”

However, he said, instead of just increasing the petroleum levy by Rs55 per litre for this week and committing to reduce it back to the original rate from March 15, so that the expectation about a price increase on March 15 ended, it raised the prices for oil companies and gave them windfall profits.

“This is beyond comprehension.”

“This is really just giving huge profits to oil companies at the cost of consumers and [the] government.” The oil companies had already bought the petrol and diesel being sold today before February 28 at lower prices, he added.

He explained that this was similar to last year’s allowing of sugar millers to export sugar and increase sugar mills’ profit at the cost of the public.

“This time, the government allowed excessive profit to oil companies. It’s always [the] large companies over the people. To stave off shortages, it should have either increased [the] petroleum levy for a week or done better monitoring of oil companies and petrol pumps. But it chose to do a favour to oil companies.” Staff Report