What is the amount of Zakaah due on petroleum and gas?

All perfect praise be to Allaah, The Lord of the Worlds. I testify that there is none worthy of worship except Allaah, and that Muhammad, sallallaahu ‘alayhi wa sallam, is His Slave and Messenger.

Petroleum and gas, like all other minerals except for gold and silver, may be under public or private ownership.

If they are publicly owned, no Zakah is due on them, because they are not owned by a certain person, and, in the end, they are spent on the public welfare of Muslims.

If they are privately owned, the matter is debatable among scholars as to what is due on them when extracted.

The majority of scholars are of the opinion that nothing is due on them when extracted, because they are not among the kinds of things on which Zakah is due, nor are they property gained as booty on which one-fifth is due.

According to other scholars, whoever extracts anything of that owns it, and thus Zakah becomes due on him, in view of the general significance of the Statement of Allaah The Almighty (which means): {O you who have believed, spend from the good things which you have earned and from that which We have produced for you from the earth.} [Quran 2:267]

Because they (petroleum and gas) are minerals like gold and silver, Zakah is due on them when extracted, just as it is due on gold and silver when extracted.

Similarly, because it is property which, if gained as booty, one-fifth becomes due once it is extracted from the mine, Zakah becomes due on it like gold and silver.

Hence, due is one-fortieth, i.e. 2.5%, which should be spent on the known Zakah disbursement channels. This is the closest and the most correct opinion in view of the proofs mentioned above. There is no proof nor valid analogy for cancelling out Zakah from it; and Allaah Knows best.

However, this difference of opinion is specific only to Zakah on it at the time of extraction. But if it is invested in trade, and has revenues and profits more than the costs of its extraction and manufacturing, there is no difference of opinion among the scholars that, in this case, it is one of the articles of merchandise on which Zakah is due. It is like vegetables, on which no Zakah is due in themselves, but if they are sold and yield profits, they should be joined to the other kinds of property in one’s possession on which Zakah is due.

Allaah Knows best.