'Petrol costs Rs220; rest goes to taxes and company profits'

KARACHI: Awaam Pakistan Party (APP) Secretary General and former finance minister Miftah Ismail has claimed that the cost of petrol reaches around Rs220 per litre when it arrives at Karachi Port, with the remaining retail price comprising taxes and oil companies’ margins.

Speaking on ARY News’ programme Sawal Yeh Hai, Ismail said petrol costs around Rs220 per litre, including import duties, when it reaches Karachi Port.

“The amount above Rs220 consists of taxes and the profits of oil companies,” he said.

Ismail alleged that the government does not compromise on the profit margins of Oil Marketing Companies (OMCs).

“The government always stands with the companies when it comes to protecting their profits,” he said.

He also criticised the government’s taxation policy, saying any proposal to reduce petrol prices for motorcycle riders by Rs10 per litre is often met with concerns about commitments to the International Monetary Fund (IMF).

According to Ismail, nearly 60% of petrol is consumed by motorcycle riders, who are effectively paying around Rs120 per litre in taxes.

“If you impose a 45% tax burden on poor people, the cost of living will inevitably increase,” he said.

The former finance minister also criticised the government’s decision to introduce a daily petroleum pricing mechanism, saying deregulation could have been implemented after a week or 15 days.

He alleged that the government increased petrol prices midway through the pricing period, allowing oil companies to benefit despite being required to sell fuel at the previous rate until the 15th of the month.

“The government raised prices in the middle of the period and gave profits to oil companies, even though they were bound to sell petrol at the lower price until the 15th,” he said.

Ismail claimed that genuine deregulation had not taken place and accused the government of merely increasing prices instead of introducing market-based reforms.

“There has been no deregulation. The government is only increasing prices,” he added.

He further said that the pricing system had only changed in frequency, rather than in substance.

“Earlier, prices were revised every week; now they are revised every day,” he said.

Ismail also criticised the government’s fiscal management, claiming that despite repeated calls for austerity measures last year, government spending exceeded the allocated budget by Rs50 billion.

Petrol price announced in Pakistan for next two days

Meanwhile, the Petroleum Division has announced that petroleum product prices will remain unchanged until July 27.

The division has issued a notification stating that prices will be retained for the next two days—Sunday, July 26, and Monday, July 27.

Petrol prices will remain at Rs 335.18 per litre, while diesel will stay at Rs 383.46 per litre for the two days.