The Federal Constitutional Court (FCC) has taken up two constitutional petitions challenging the imposition of a hefty petroleum levy and the recent increase in petroleum product prices. The FCC registrar has assigned case numbers to the petitions, signaling the court's willingness to hear the matter.
JI Chief's Petition Seeks Independent Mechanism
In a petition filed by Jamaat-e-Islami (JI) chief Hafiz Naeemur Rehman, the FCC has been requested to issue directions for the formation of an independent, expert-assisted mechanism or commission. This body would examine the constitutional, fiscal, economic, and federal implications of the current petroleum levy structure. The government had announced the petroleum and carbon levy as part of an iron-clad commitment with the International Monetary Fund (IMF). Currently, the petroleum levy on petrol stands at Rs117.41 per litre, while the levy on high-speed diesel (HSD) is Rs42.60 per litre.
Advocate Bhutta's Petition Against Price Hike
Separately, the FCC has also entertained a petition filed by advocate Zulfikar Ahmed Bhutta on May 1. The petitioner has requested the court to direct the government to withdraw the recent price hike in petroleum products. Both petitions were filed directly in the FCC under Article 175E of the Constitution. Interestingly, the FCC registrar's office did not raise any objections to either petition, and the court entertained them weeks after they were filed.
Background on Petroleum Levy
The FCC was established by the present regime through the 27th Constitutional Amendment. 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).
