Pakistan ran a fiscal surplus on petrol — not policy

The opening frame: GDP is up, the street is not

The episode opens with Muzamil setting a context most viewers will recognise. Pakistan’s GDP growth is moving back toward four percent. Tax collection is up. The government is being credited, in some quarters loudly, for stabilising the macro picture. And yet, as Muzamil puts it, the distance between what the government claims and what the public feels has rarely seemed wider. He flags a phrase he keeps hearing inside the United States as well — the “K-shaped economy”, where the top three to four percent get richer while everyone else absorbs the cost of stabilisation. He suspects Pakistan is now living through the same shape.

Muzamil introduces his guest, Adeel Azhar, as a finance-focused radio host he has wanted on the show for over four years, and a regular panellist Pakistani viewers will recognise from Raftar. Adeel opens by calling it an honour to be on the show and immediately moves to answer the question Muzamil leads with: what is the actual state of the economy right now?

His first frame is honest. “By nature I am a very optimistic person,” he says, but he is not willing to confuse optimism with the data. On the numbers, things could have been far worse. The rupee did not crash. Imports did not get catastrophically expensive. Inflation, after a frightening run, briefly registered low single digits — but largely on the back of the high-base effect from the previous year. The moment that base normalised, monthly inflation prints came right back into double digits.

The question Adeel is more interested in is the one the headline does not answer. “How are people on the ground?” he asks. “How are they feeling about the economy?” His answer is direct: things are pretty dire. He locates the most recent inflection point in fuel — specifically, the petroleum price moves that followed the escalation around Israel, the United States and Iran. People had, he says, adjusted themselves into the earlier difficulty. The fuel shock is what is now breaking the back of the lower-middle class.

The petroleum development levy as a hidden tax

The conversation tightens around a specific instrument: the petroleum development levy, or PDL. Adeel walks Muzamil through what is actually happening at the pump. The ex-refinery price, the underlying procurement cost, has come down by a few rupees. The retail price has gone up. The entire increase, he says, is being routed through the PDL. That is the line item the government has been quietly turning up.

He cites the number. Twelve hundred billion rupees in PDL collections, up forty-five percent — a figure he references off a Shahbaz Rana report in Express. And, he is careful to note, that is not even the full-year run-rate of the new regime. Once the next fiscal year cycles through with one-third of the budget effectively coming from PDL, he estimates the government should be earning close to two thousand billion rupees through this single levy.

This is the mechanism Adeel wants the listener to see clearly. Pakistan’s improved fiscal headline is not the result of base-broadening, documentation, or a sudden expansion of productive activity. It is, in his reading, a single regressive instrument being turned harder. “Things could have been far worse,” he repeats — but the visible improvement is being financed at the pump, by the same lower-middle and middle class households the government claims to be protecting. He calls the political consequence “bipartisan”: even supporters of the ruling arrangement are starting to say, quietly, that it has now gone too far.

The middle class is the segment everyone forgets

One of the sharpest passages in the conversation is Adeel’s defence of the middle class as the segment that actually runs a country. He brings up a debate he had with the economist Ammar Habib Khan, a friend whose net-metering position Adeel characterises as hawkish — that solar tariffs ought to be priced much higher. Adeel’s pushback is that the solar revolution in Pakistan is a middle-class phenomenon. It is one of the few moves households have actually made for themselves in response to a power-sector arrangement that was failing them. To turn around now and price the escape route punitively, he argues, punishes the only segment that is still building.

He extends the same logic to the broader squeeze. The government cannot raise revenue from the protected top — the rent-seekers, the political-economy winners with their hands on the regulators. So it does what it always does. It compresses the middle. He lists the channels: PDL on fuel, capacity-payment recoveries on electricity bills, an increasingly aggressive documentation push aimed at salaried and self-employed households whose income is already legible. “Government is squeezing,” he says, repeatedly. The image he keeps returning to is of a class being wrung out so the headline number can hold.

Muzamil agrees, and adds a global frame. He sees the same instrumentation in the United States — what he calls a push toward digitisation of currency by a global elite that wants control over personal finances. He invites Adeel to zoom out with him: the macro picture, he says, is one where doing things off-grid, at scale, will become technically impossible — at least at the scale Pakistan still tolerates today.

The auto policy and the EV detour

The conversation pivots briefly to the auto sector and the new EV policy. Adeel’s frustration is on display. The auto sector, he points out, is one of the most protected industries in the country. New entrants are coming in. Pricing power is high. And yet the new EV policy is being framed as a benefit to be extended to that same industry. “It is unlimited power they have,” he says of the regulators and policymakers. “They can make any law and have it implemented.” His objection is not to electric vehicles. It is to the choice, again, of pushing a concession into a sector that already has protection, rather than into a sector that would actually broaden the productive base.

He puts the point in personal terms. He had just moderated a session at a CFO conference. He had said the same thing there, to a room of finance executives. And his read, on the way out, was that the room agreed with him.

The eighteenth amendment and why the centre has no room

Adeel then makes a structural argument that is easy to miss in day-to-day political coverage. Asif Ali Zardari, he says, wrote his name into Pakistan’s constitutional history with the eighteenth amendment — and a great deal of the country’s current fiscal mess is, in his view, downstream of that amendment.

The mechanism, in Adeel’s framing, is straightforward. The federal government does the work of a tax collector. It takes the political cost of every levy. The surplus is then pooled, and most of it is shipped down to the provinces. The provinces collect, spend, build their patronage networks, and face very little of the political cost. Zardari, Adeel says, was visionary about exactly this. He may have suspected that the PPP would not form federal governments easily in the years ahead — so he engineered super-empowered provinces, knowing the PPP’s grip on one of them, Sindh, was effectively permanent. And whoever controls Sindh, in Adeel’s reading, controls Karachi — and whoever controls Karachi has a super-power inside Pakistan.

This is the structural reason, in Adeel’s argument, that the federal centre keeps running back to the same regressive levers — the PDL chief among them. The constitutional architecture has taken the easier instruments away from it.

Karachi, the red line, and an empire on fire

The discussion moves into Karachi and Sindh specifically. Adeel’s case study is the red-line BRT — Karachi’s mass-transit project that has, in his telling, become the most notorious live example of provincial governance failure in the country. He credits Mohammad Zubair, in passing, with the early credit for the project’s origination, but his read on what has happened since is unsparing. He walks through the building-control architecture — what used to be city-district government Karachi, what used to be the Karachi Building Control Authority — and how, since 2009, those organs have been absorbed into Sindh’s provincial machinery. People miss that time, he says. There was somewhere to go when something went wrong.

Muzamil sharpens the question. Where does Adeel put the PPP today, given the way pressure groups are visibly turning on each other as resources shrink? “The empire is on fire,” he says, careful to flag that he means this as analysis, not conspiracy. The threats coming at the PPP in the last two or three months — give us Karachi, or give us the money — are, for Muzamil, evidence of exactly the constitutional design Adeel has just described meeting its fiscal limit.

Adeel’s read on the PPP, threaded through the next stretch, is that there is now an understanding inside the arrangement that the party needs to be reined in. They have done, he suggests, what they were going to do. The political-economy ground under them is shifting.

PMLN, Punjab, and the limits of the Maryam moment

The conversation moves north, to Punjab and the PMLN. Adeel is even-handed but unenthusiastic. He grants that Maryam Nawaz has had an impact — “people from Punjab will come out in big numbers and they will vote for me,” he ventriloquises, capturing the party’s confidence — and concedes that if elections were called, a “universal shut-up call” could be delivered to people like him who have written off the resurrection. He has the discipline to flag that as the disconfirming case for his own view.

But on the substance, his point is comparative. The PMLN’s standard defence is to point at Sindh and the PPP. “If you compare yourself to Karachi,” he says, “your comparison is with the Peoples Party — for which you only need to work sixty-five days out of three hundred and sixty-five.” His critique of the earlier Buzdar government is, by his own account, simple: if Buzdar was bad, people should have voted him out. The intervention from above, in Adeel’s framing, broke the corrective loop. Whether the current PMLN delivery story is real enough to flip Punjab back, he is not yet convinced.

PTI without Imran Khan, and the leadership question

The PTI section is the one where Adeel’s voice tightens. Without Imran Khan, he says, the party effectively collapsed. He walks through the bench that used to exist — Asad Umar as a serious leader, Jahangir Tareen having already exited, Hammad Azhar as someone he personally rated as refined and sophisticated, Shireen Mazari as a credible voice on international affairs. There was, he insists, an intellectual think tank around the party. None of that is operative now.

The diagnostic he uses is the one he runs in his own leadership trainings with young Pakistanis. He asks them to give him an example of a leader. Ninety percent of them, he says, come back with one name: Imran Khan. It is not Bilawal Bhutto Zardari. It is not Maryam Nawaz Sharif. It is not even, he is careful to point out, Nawaz Sharif himself. For Adeel, that is the single hardest data point the political opposition has to contend with. The bench has not been built.

He also, in this same stretch, surfaces a generational worry that sits behind the politics. He grew up in a Pakistan where, at eighteen, he turned down the option of going abroad. He chose to stay. That emotional bonding to the country, he says, is no longer obviously present in the generation now coming up. He references a former teacher of his — a senior figure — who told him “I never needed any additional degree after IBA. My peers were Wharton, Harvard, NCAT graduates, and I consider myself at par with them.” The bonding to the institution and to the country was strong enough that the foreign degree was never the goal. Adeel is not sure that holds anymore.

What an individual is supposed to do with all of this

Toward the close, Muzamil asks the question listeners are by now waiting for. Is there a way out? Is there a path where this resolves logically rather than catastrophically?

Adeel answers in two registers. On the macro, he is still hopeful that the country’s real power-holders will, at some point, internalise a simple sentence: “we should run Pakistan, and we are running it well.” Whether he believes that fully or not, he says it is the prayer he still makes.

But the practical answer he gives is at the level of the individual, and it is striking in how unromantic it is. He runs leadership training with young Pakistanis, and the question he keeps putting to them is the legacy question. “Every time you step into your office,” he tells them, “think about your legacy. What are you leaving behind?” He applies it to himself with discomforting directness. “Adeel Azhar comes home after the show and dies. He does not get to do tomorrow’s show. In what words will people remember him?”

From there, the prescription gets concrete. Stop being consumed by the things outside your control. Look honestly at where you can cut expenses. Find the hidden skill you can monetise on a weekend. Take a step back from the news cycle if it is making you depressed. Protect the relationships you have with your family, your friends, your peers, your colleagues — those are inside your jurisdiction.

Muzamil closes the conversation by widening the lens one last time. He flags that the friends he speaks to in the United States are reporting similar feelings — that the moment feels like one of those historical inflection points, somewhere between a financial reset, an industrial-AI transition, and a sovereign-debt reckoning. He thanks Adeel, notes how rarely they have managed to align the schedules, and signs off with the invitation he ends most political episodes with: tell me, in the comments, without abuse, what you actually think.