Pakistan Ends Fuel Subsidy Scheme as Global Oil Prices Fall
Why this matters: local context for readers following news across Pakistan and the region.
The federal government has decided to end its fuel subsidy programme for motorcyclists, small-scale farmers, and public as well as goods transport operators after a significant drop in oil prices. The decision was made during a meeting of the National Steering Committee on Fuel Subsidy chaired by Deputy Prime Minister Ishaq Dar on Monday. During the session, the committee assessed the implementation of the subsidy initiative for motorcyclists, small farmers, and transport operators across the provinces, along with Gilgit-Baltistan and Azad Jammu and Kashmir. According to an official statement, the committee observed that global oil prices had declined sharply and that the resulting benefit had already been transferred directly to consumers through lower fuel prices. Based on this, members agreed to discontinue the subsidy programme after receiving approval from Prime Minister Shehbaz Sharif. Dar praised the committee’s efforts and highlighted the importance of continued coordination between the federal government and provinces. He also directed authorities to use lessons learned from the programme to improve future public service initiatives, particularly by addressing shortcomings in data management and delivery systems. The subsidy package had originally been introduced after fuel prices surged earlier this year following the closure of the Strait of Hormuz amid tensions triggered by the US-Israeli strike on Iran in February. Under the programme, owners of motorcycles, rickshaws and vehicles up to 800cc were receiving subsidies ranging between Rs50 and Rs100 per litre. Public and cargo transport operators were given monthly financial assistance of Rs70,000 to Rs100,000 to keep fares under control, while small farmers benefited from a diesel subsidy of Rs100 per litre. Last week, the government slashed petrol prices by Rs74.28 per litre and diesel prices by Rs67.31 per litre, lowering the new rates to Rs299.50 and Rs311.47 per litre respectively. The reduction foll