ISLAMABAD: A powerful parliamentary caucus on Thursday issued a sharp warning against the government’s growing reliance on the Petroleum Development Levy, saying excessive fuel taxation amid the Iran crisis has intensified inflation, hurt low income families, and exposed serious weaknesses in Pakistan’s economic and energy policies.

During a high level policy briefing in Islamabad, members of the Parliamentary Forum on Energy and Economy said the petroleum levy must not be treated as a revenue generation tool under any circumstances. The forum noted that Pakistan’s dependence on imported fossil fuels had left the country dangerously vulnerable to global shocks, especially after tensions around the Strait of Hormuz disrupted regional energy markets.

PPP MNA Dr Nafisa Shah, co convener of the forum, said the crisis reflected years of flawed policymaking rather than a temporary external disruption. She stressed that Pakistan could no longer survive through short term fixes and called for a sovereign and resilient energy transition based on domestic resources and long term planning.

Barrister Danyal Chaudhry, parliamentary secretary for information and broadcasting, urged the government to maintain transparency over fuel pricing, IMF linked reforms, and taxation measures. He said public trust could collapse if authorities failed to communicate honestly during a period of severe economic pressure and rising living costs.

The forum revealed that domestic fuel prices had surged by more than 50 percent from pre crisis levels and at one point crossed Rs458 per litre. Experts said repeated increases in the Petroleum Development Levy, which has reportedly climbed to nearly Rs117 per litre, were the main reason behind the price shock despite fluctuations in global oil markets.

Economists and energy experts warned that the levy had become a regressive fiscal instrument that disproportionately impacts ordinary citizens while bypassing provincial revenue sharing mechanisms. Participants also highlighted mounting circular debt, declining domestic oil production, and rising import dependence as signs of a deeper energy emergency. The forum announced that a detailed report containing urgent recommendations would soon be submitted to the federal government.