PM rejects proposal to jack up petrol, diesel prices

Centre, provinces agree on app-based fuel subsidy for motorcycles, rickshaws

ISLAMABAD:   Prime Minister Shehbaz Sharif rejected on Friday another summary proposing a sharp increase in petrol and diesel prices, opting to keep fuel rates unchanged amid rising global oil costs.

Addressing nation on Friday, the premier said he had turned down a proposal to raise the petrol price by Rs95 per litre and the diesel price by Rs203 per litre. He said the government would not pass the burden to the public and would instead bear the additional cost in the week of around Rs56 billion itself.

PM Shehbaz said that in line with rising global oil prices, petrol in Pakistan should have reached Rs544 per litre and diesel Rs790 per litre. However, he added that the government kept prices unchanged, absorbing about Rs125 billion in three weeks.

Meanwhile, the Centre and the provinces on Friday agreed to immediately roll out a mobile application-based quota system for the provision of fuel for two- and three-wheelers to ensure a targeted subsidy for the low-income strata and minimise the leakage of public money into untargeted avenues.

“The participants agreed to expedite efforts to finalise a targeted subsidy framework using technological solutions, while ensuring continued coordination between the federal and provincial governments”, the Ministry of Finance said after a consultative meeting on the subject with the provinces.

Finance Minister Muhammad Aurangzeb, who presided over a high-level consultative meeting on the petroleum products situation, also highlighted the need to “promote responsible consumption behaviour and ensure that policy responses remain fiscally prudent while maximising relief for the public”, the statement added. The meeting was also attended by officials from the provincial governments.

The meeting commenced with a detailed presentation by the Petroleum Division on the current status of petroleum products’ availability in the country. It was noted with satisfaction that the fuel supply situation remained stable and adequate across the country, it said.

The Ministry of Information Technology and Telecommunication also gave a comprehensive presentation on proposed technological solutions to facilitate a targeted subsidy mechanism for petroleum products, with a focus on transparency and efficient delivery, it added.

The provincial leadership shared their views on the prevailing situation and policy options. Sindh Chief Minister Murad Ali Shah appreciated the federal government’s efforts to maintain uninterrupted fuel availability, while emphasising the importance of behavioural measures to promote fuel conservation, the statement said.

Punjab Senior Minister Marriyum Aurangzeb, meanwhile, emphasised the need to develop multiple policy scenarios in response to the evolving petroleum price situation. She stressed that any reduction in international petroleum prices should be effectively passed on to consumers and highlighted the importance of incorporating behavioural aspects into crisis management to ensure more sustainable consumption patterns.

Khyber Pakhtunkhwa Finance Minister Muzzammil Aslam lauded the efforts of Aurangzeb and Petroleum Minister Ali Pervaiz Malik in effectively managing the oil supply situation. He noted that Pakistan’s management of petroleum supplies had remained comparatively better than that of several countries in the region, the statement said.

According to the handout, the Finance Division briefed the participants on the fiscal situation and noted that limited fiscal space was available, primarily confined to revenues from the petroleum levy. It was emphasised that any relief measures would need to be carefully calibrated to maintain macroeconomic stability. In his remarks, Aurangzeb underscored that the current situation should be treated as an opportunity to undertake structural reforms rather than a constraint. He emphasised the importance of adopting data-driven decision-making, particularly in the areas of taxation and subsidy design, to ensure transparency, efficiency, and better targeting of relief. Balochistan Minister for Finance and Mines and Mineral Development Mir Shoaib Nosherwani, the chief secretaries of all four provinces, the petroleum minister, IT Minister Shaza Fatima Khawaja were among those who attended the meeting. Staff Report