ISLAMABAD: Jamaat-i-Islami (JI) emir Hafiz Naeemur Rehman on Monday approached the Federal Constitutional Court (FCC) against the petroleum levy, arguing that the government had effectively granted itself unrestricted power to tax citizens through executive notifications without parliamentary oversight.
The government had announced a petroleum and carbon levy on June 14, 2025, under an iron-clad commitment with the International Monetary Fund (IMF). Last month, the government had cut the levy by Rs80 amid the global oil crisis triggered by the Middle East crisis.
However, following the IMF’s condition of restoring an average Rs80 per litre petroleum levy on petrol and high-speed diesel last week, the government passed on a slight reduction in global oil prices to domestic consumers. The petroleum levy on petrol currently stands at Rs117.41 per litre, while the levy on HSD is Rs42.60 per litre.
In a petition moved through senior counsel Imran Shafeeq, Rehman sought a declaration from the FCC that the present petroleum levy regime operating under the Petroleum Products (Petroleum Levy and Climate Support Levy) Ordinance, 1961 — by way of impugned amendments introduced through section 3 of the Finance Act, 2025 — was ultra vires, unconstitutional and violative of Articles 4 (right of individuals to be dealt with in accordance with law, etc), 9 (security of person), 14 (inviolability of dignity of man, etc), 18 (freedom of trade, business or profession), 25 (equality of citizens), 77 (tax to be levied by law only), 90 (the federal government), and 160 (National Finance Commission) of the Constitution.
The petition also sought the suspension, restraining, or appropriate limitation of the further enhancement of the petroleum levy and climate support levy through executive notification mechanisms, unless and until constitutionally compliant legislative safeguards and statutory limits were enacted by Parliament.
The petition was filed against the backdrop of JI’s recent nationwide protest against heavy petroleum levies, rising inflation, and excessive electricity costs.
In the petition, the JI emir requested the FCC to order — if deemed appropriate — the constitution of an independent expert-assisted mechanism or commission to examine the constitutional, fiscal, economic, and federal implications of the present petroleum levy structure. The same would also recommend a constitutionally compliant statutory framework that remains consistent with parliamentary supremacy and fiscal accountability.
The petition highlighted that while general sales tax on petroleum products entered the divisible pool shared with provinces under Article 160, the petroleum levy remained exclusively with the federal government. This constituted “colourable legislation” — using the label ‘levy’ to bypass constitutional fiscal distribution mechanisms.
