Sindh High Court dismisses plea against petroleum pricing mechanism

KARACHI: The Sindh High Court has rejected a petition challenging the mechanism used to set petroleum prices, ruling that matters such as price determination, taxation and economic policy fall mainly within the authority of the executive and legislature.

A two-member constitutional bench headed by Justice Adnan-ul-Karim Memon issued the order on Monday while hearing a petition filed by Syed Khalid Shah against the ministries of finance and energy and petroleum, the establishment division, and the Oil and Gas Regulatory Authority. The petitioner had questioned the method adopted for fixing petroleum prices and argued that the current system did not reflect actual international crude oil prices. He also contended that an excessive petroleum development levy had been imposed unlawfully and in violation of the Constitution.

The petitioner asked the court to direct the respondents to lower petroleum prices and make public every component of the pricing formula on the basis of internationally recognised principles and actual market conditions. At the outset, the bench asked the petitioner’s counsel to satisfy the court on the maintainability of the case, noting that the matter related to a decision taken by the executive.

During arguments, the petitioner’s lawyers said petroleum products were essential commodities affecting transport, agriculture, industry, electricity generation and daily life. They argued that despite a significant decline in international crude oil prices since early 2025, domestic prices had not been reduced in proportion. They further submitted that after the statutory cap on the petroleum development levy was removed, the levy continued to be increased and retail prices were kept artificially high, turning the pricing mechanism into a revenue tool rather than a fair reflection of international market conditions.

The lawyers also argued that a large share of the retail price consisted of the petroleum development levy and other fiscal charges, while the respondents had not disclosed a transparent and verifiable formula showing how the final consumer price was calculated.

In its order, the bench said the petitioner’s grievance was essentially directed at the fixation of petroleum prices, the amount of the petroleum development levy and the federal government’s fiscal policy. “The determination of prices, levy of taxes and formation of economic and fiscal policy fall primarily within the exclusive domain of the executive and legislature”

The court said that, while exercising constitutional jurisdiction, it would not ordinarily interfere in such matters unless they were clearly without lawful authority, driven by mala fide intent, arbitrary, discriminatory or in breach of a specific constitutional or statutory provision.

The bench further observed that the petitioner had challenged the wisdom, fairness and transparency of the pricing mechanism but had not placed any material on record to show violation of a mandatory statutory provision, or to establish a jurisdictional defect, mala fides or a constitutional infirmity requiring judicial review.

The order added that fixing petroleum prices involved a range of economic considerations, including global crude prices, exchange rate movements, freight, refining costs, taxation, fiscal requirements and other policy factors, all of which required expert assessment and were not suitable for judicial determination in constitutional proceedings.

The court also said the High Court, in constitutional jurisdiction, did not act as an appellate forum over government economic or fiscal policy and should exercise restraint unless a policy was shown on its face to be unconstitutional or contrary to law. It further held that the petitioner had failed to establish the infringement of any enforceable fundamental right, and that dissatisfaction with prevailing petroleum prices or fiscal measures was not by itself a sufficient basis for invoking the court’s extraordinary constitutional jurisdiction.

“For the foregoing reasons, this petition is not maintainable under Article 199 of the Constitution and is accordingly dismissed in limine,” it concluded.