Pakistan is weighing a targeted fuel subsidy plan that could extend relief of up to Rs300 billion to the public, according to Finance Ministry sources. The proposed scheme aims to ease the pressure from rising petroleum prices, especially for low-income users of two- and three-wheelers.
The federal government has asked provinces to cooperate financially and allocate Rs154 billion for the subsidy plan. Officials are now considering how to share the burden created by higher global oil prices.
According to the source, the government wants to provide cheaper fuel specifically for motorcyclists and rickshaw drivers. One option under discussion is to pass the full impact of global oil prices directly on to consumers. The second is to offer subsidised fuel in limited quantities.
Under that proposal, motorbike users could receive 20 litres of fuel at a reduced price, while rickshaw drivers could receive 30 litres at a subsidy. The total estimated cost of funding the scheme for six weeks is Rs300 billion.
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The federal government has approached provincial governments for financial cooperation. A meeting involving the president, prime minister and provincial chief ministers is expected next week to take a final decision on the matter.
That meeting will likely determine whether the relief package moves forward in its current form and how the cost will be shared among the federation and provinces.
The Ministry of Information Technology has developed a specialised mobile app to support the transparent distribution of subsidised fuel. The digital system is intended to help manage the scheme if it is approved.
Officials have linked the relief effort to the ongoing energy crisis and regional geopolitical tensions, which they say are contributing to rising fuel prices.
