Fuel to Get Rs. 40 per Litre Cheaper for Deserving Citizens

The federal government has tentatively agreed to expand its targeted subsidy on petroleum products, potentially benefitting up to an additional five million consumers, according to sources speaking to ProPakistani. This decision follows discussions between Prime Minister Shehbaz Sharif and Jamaat-e-Islami (JI) leader Hafiz Naeem ur Rehman at the Prime Minister’s House.

Should the technical committees from both sides agree on the emerging consensus, eligible beneficiaries could see a reduction in the price of petroleum products by Rs. 30 to Rs. 40 per litre, sources suggested. The nature of the subsidy was the main area of contention during the negotiations. The government argued that a targeted relief approach was essential under the International Monetary Fund (IMF) program, citing concerns that a blanket subsidy could jeopardize the program and benefit both wealthy and low-income consumers.

Consequently, the government proposed adding up to five million more consumers to the existing petrol subsidy scheme and considering the inclusion of older motorcycle models and vehicles. The JI emphasized the importance of including diesel in the subsidy, as it plays a crucial role in agriculture and other vital sectors. Consequently, the government offered to extend the targeted subsidy to diesel to some extent.

The government has already reduced the price of locally produced diesel by Rs. 32 per litre by dissociating it from international market prices, following JI's pressure and negotiations. Technical committees from both sides will continue discussions to finalize the framework, including the final scope, eligibility criteria, and subsidy amounts.

Earlier, Hafiz Naeem had requested an additional 7 to 10 days to resolve JI's demand to eliminate the petroleum levy.