The midnight transfer?

2026-03-15 - 23:14

At midnight on March 6, Government of Pakistan, Ministry of Energy (Petroleum Division) issued a press release. The press release changed a number. That is all the press release did. It changed Rs266.17 per litre of petrol to Rs321.17 per litre. Fifty characters. Fifty-five rupees. One line. One decision. At midnight on March 6, refineries were holding 550 million litres of fuel; Oil Marketing Companies (OMCs) were holding 600 million litres and petrol pumps 170 million. Total fuel in system: 1.5 billion litres. Purchase price of each and every litre of the 1.5 billion litres: old. Sale price of each and every litre of the 1.5 billion litres, from midnight: new. Additional work performed by the refineries to justify the Rs55 per litre difference: none. Additional work performed by the OMCs to justify the Rs55 per litre difference: none. Additional work performed by petrol pumps to justify the Rs55 per litre difference: none. Refineries and OMCs together captured roughly Rs60 billion. Petrol pumps about Rs7 billion. The government nearly Rs15 billion. One midnight adjustment. One number changed. Red alert: Over the next 28 days, Rs82 billion will move — from the pockets of the poor masses to refineries, to OMCs, to petrol pump owners, and to the government. For the record, additional crude refined: 0 litres. Additional fuel imported: 0 litres. Additional hours worked: 0. Additional risk taken: 0. For the record, Pakistan consumes roughly 50 million litres of fuel per day. A Rs55 per litre increase translates into an additional daily burden of about Rs2.75 billion on consumers. Over a month, that becomes roughly Rs82 billion. Yes, Rs82 billion will move — from consumers to refineries, to Oil Marketing Companies, to petrol pump owners, and to the government. Red alert: The government changes a number. And Rs82 billion begin changing hands. Here’s the timeline: March 1: Government raises petrol price by Rs8 per litre. March 4: Finance minister briefs Senate. Fuel stocks sufficient for 28 days. No shortage. No crisis. March 6: Government announces Rs55 per litre increase, effective midnight. March 6, midnight: Rs82 billion begin transfering, silently, from future petrol and diesel consumers to present inventory holders. Time elapsed between “no shortage” and Rs55 hike: 48 hours. Imagine; a petrol pump owner changed the number on the board outside his station and made around Rs800,000. Imagine; a motorcyclist–who holds no inventory–will have to cough out around Rs1,500 additional every month. His say in the matter: none. Imagine; the pump owner changes a number – the motorcyclist pays the bill. In theory, the government follows a fortnightly–now a weekly–pricing formula based on international oil prices and the exchange rate. In practice, the midnight adjustment re-prices fuel already sitting in storage — inventory purchased at the old price but sold at the new price. The government may point to the Platts benchmark, to international oil prices, or even to the U.S.–Israel–Iran conflict. None of those explain why a policy decision instantly transfers billions to existing inventory holders. On March 4, the finance minister told the Senate there was no shortage. On March 6, the government announced the largest single fuel price increase in the history of the country. We know what happened. The government changed a number. Inventory turned into profit. And Rs82 billion began moving. Do we know why it happened? Do we know who made the call, in which room, at which hour, and on whose advice? Was the 48-hour gap between “no shortage” and Rs55 increase a coincidence or a calculation? —The writer is a journalist and political analyst.