A special multi-party panel of the National Assembly, headed by PTI’s Atif Khan, is set to investigate the reasons behind the unprecedented price surge and whether a new tax on sugar millers’ windfall profits could help ease consumer burdens, Business Recorder reported.
The sugar price in the domestic market has surged to around Rs 200 per kilogram.
The panel is scheduled to meet today [Monday] to look into how policy gaps, export incentives, and industry actions have led to sugar mill owners earning an estimated Rs 300 billion in profits. The inquiry will examine cyclical price increases, export-import fluctuations, and the role of deregulation in driving up prices.
The NA panel is now considering imposing a windfall tax on sugar millers, similar to the tax levied on banks, to capture part of their extraordinary profits and direct it towards subsidising sugar prices for consumers. This move could be the first fiscal response to a sector long criticised for manipulating the market and government policies.
The push for accountability follows a recent statement by the Auditor General of Pakistan during a Public Accounts Committee meeting, revealing that sugar mill owners benefited significantly from price fluctuations and government policies favoring exports. Critics in parliament have referred to the sugar industry as a “mafia” wielding disproportionate power over policy.
Federal Minister for National Food Security and Research, Rana Tanveer Hussain, had earlier announced full deregulation of the sector, removing government control over prices, procurement, and supply. However, despite pledging to take action against hoarders and naming mill owners on the Exit Control List (ECL), sugar prices have continued to rise beyond agreed limits.
Under an agreement made on July 15, 2025, between the government and the Pakistan Sugar Mills Association (PSMA), the maximum ex-mill price was fixed at Rs 165/kg, with a monthly increase of Rs 2 until mid-October. However, insiders claim the increase is based on a 25% interest rate, which has since dropped to 11%, rendering the price hike unjustified.
While the Ministries of Finance and Commerce resisted sugar exports due to price concerns, some mill owners withheld stock until export approvals were granted, capitalizing on higher global prices—reportedly Rs 30-40/kg more than domestic rates—while also avoiding sales tax on exports.
In response to the ongoing sugar shortage, the government plans to import 100,000 tons of sugar through the Trading Corporation of Pakistan by October. This follows a broken assurance from PSMA that prices would not exceed Rs 140/kg.
