Petroleum levy to pay IPPs?

IN FY2022–23, Pakistan collected Rs580 billion from its citizens through the petroleum levy. It then handed Rs487 billion as capacity payments to the IPPs—for power plants kept on standby, whether electricity was consumed or not. This is not a coincidence. It is a system. Capacity payments have since quadrupled to Rs2 trillion. The petroleum levy has more than quadrupled: Rs20 per litre in 2022, Rs103 today. Rs580 billion collected then, Rs1,500 billion now. Still not a coincidence. Still a system. And still your pocket. Imagine: Rs20 per litre in 2022, Rs103 today. Petroleum levy moving from Rs20 per litre to Rs103 is not the result of global commodity prices, not the consequence of a weak rupee, not an unfortunate side effect of external shocks. Petroleum levy moving from Rs20 per litre to Rs103 is a government decision, made weekly, in a notification, without a parliamentary vote. This is inflation by design. This is, in the precise meaning of the term, structural inflation. This is how petroleum levy shows up as structural inflation in every Pakistani kitchen: kerosene oil up 155 percent, onions up 42 percent, vegetables up 36 percent, atta up 31 percent. Not estimates. Not market gossip. Year-on-year figures from the Pakistan Bureau of Statistics (PBS). Petroleum levy once had a statutory ceiling – the Finance Act 2025 quietly removed that ceiling. That cap is now gone. The executive can set the petroleum levy at any rate it chooses, by notification, without a vote, without debate, without accountability. This means the tax that is eating your kitchen budget is no longer subject to any legal limit. It can go to Rs200. It can go to Rs300. There is no law that says it cannot. Petroleum levy is a tax without a ceiling, imposed without a vote, on the necessities of the poor, to pay guaranteed returns to the rich. This is not fiscal policy – it is extraction by executive order. Petroleum levy is Rs1,468 billion extracted from the motorcycle rider, the flour buyer, t