Ex-finance minister Miftah Ismail slams govt for ‘mini-budget’ through fuel levy hikes

Former finance minister Miftah Ismail on Wednesday sharply criticized the current coalition government for imposing back-to-back petroleum levy hikes instead of passing on global oil price benefits to consumers, calling it a “mini-budget” that violates economic principles.

In a post on X (formerly Twitter), Ismail revealed that the government increased the petroleum levy by Rs10 in March and another Rs10 in April, pushing the total levy to Rs80 per liter.

Govt withholds fuel relief amid global oil drop to finance Balochistan highway

“In these two months, the government has raised taxes by Rs34 billion per month instead of giving the benefit to the people,” he stated.

Ismail argued that governments should raise petrol and diesel prices when international oil prices rise, and reduce them when prices fall – a practice he claims the current administration has abandoned.

Dismissing official claims that the levy hike would fund Balochistan development projects, Ismail asserted, “Money is fungible… No new projects for Balochistan have been approved.” He warned the extra revenue would merge into general funds.

“These additional taxes will go into the general government funds,” he claimed.

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The ex-minister alleged the government promised the IMF that it “will not reduce the petrol prices and keep increasing taxes,” effectively implementing a “mini-budget.”

The criticism comes as Pakistan faces mounting public frustration over persistent inflation despite recent drops in global oil prices.

The finance ministry has yet to respond to Ismail’s claims.

Despite declining global oil prices, the government chose not to reduce domestic petroleum prices, instead announcing it would use the savings to dualize a key highway in Balochistan.

“Addressing the participants of the meeting, the prime minister announced that instead of passing on the benefit of the recent decline in international petroleum prices to consumers, the saved amount would be utilised to dualise the vital N-25 Highway (Chaman–Quetta–Kalat–Khuzdar–Karachi Highway) in Balochistan,” according to a statement from the Prime Minister’s House.

“The initiative is aimed to provide better travel facilities to the people of Balochistan.”

As per the details, the prime minister directed that the restoration of the national highway should meet motorway standards.

Additionally, the same savings would also be used to complete Phase 2 of the Kachhi Canal, which is planned to irrigate hundreds of acres of land in Balochistan.

Global oil prices inched down on Tuesday after the International Energy Agency followed OPEC in slashing its oil demand forecast, though price falls were limited by US President Donald Trump’s suggestion of some new tariff exemptions.