The Petroleum Division on Sunday sent a summary to the Economic Coordination Committee (ECC) seeking approval for a Rs75 billion fuel relief package for 11.8 million users of motorcycles, three-wheelers and cars up to 800cc. The Petroleum Division sought Rs75 billion through a Technical Supplementary Grant (TSG) for implementation of the scheme for three months. In addition, it has sought Rs1.73 billion for the development, deployment and operation of digital Fuel Pass System (FPS), taking the total funding requirement proposed under the initiative to Rs76.73 billion.
The sharp increase in fuel prices, according to the summary, has created a severe economic shock, particularly for lower-income groups, while also contributing to broader inflationary pressures. The summary warns of visible public pressure and simmering unrest and says the situation requires policy intervention to provide relief to vulnerable sections of society. The relief plan was prepared following a direction from Prime Minister Shehbaz Sharif to formulate a mechanism for assisting the poorest segments of the population.
A series of consultations were held under the leadership of the Deputy Prime Minister, with the Minister for Petroleum, Minister for Economic Affairs, Minister for IT and Telecommunication and senior officials of the relevant ministries, Oil and Gas Regulatory Authority (Ogra), State Bank of Pakistan (SBP) and others. The government has estimated the potential beneficiary base at 11.8 million users, comprising 10 million two-wheeler users, 800,000 three-wheeler users and one million users of cars up to 800cc.
The monthly fiscal impact of the proposed subsidy has been estimated at Rs20 billion for two-wheelers, Rs1.6 billion for three-wheelers and Rs3 billion for cars up to 800cc, making the total estimated monthly subsidy cost Rs24.6 billion. The Petroleum Division has estimated the total number of two-wheelers in the country at 34 million. Assuming a retirement rate of 40 percent, the number of operational two-wheelers is estimated at 20.6 million.
Based on the experience of a previous relief scheme, the government has estimated that around 10 million two-wheeler users could qualify for assistance under the new programme. The proposed relief would be provided to the user rather than the registered owner of the vehicle. The scheme would allow one vehicle per user, with the user's CNIC, vehicle registration number and mobile phone number serving as the principal controls for registration and validation.
The entire scheme would be administered through a digital Fuel Pass System to be developed and managed by the Ministry of IT and Telecommunication. The system would handle registration of beneficiaries, issuance of fuel tokens, validation of transactions and generation of digital reports required for settlement of accounts by the Petroleum Division, Ogra and SBP. The IT ministry would provide the Petroleum Division with a daily digital log of fuel tokens consumed at each petrol pump.
The log for the preceding day would then be used by the Petroleum Division to authorise the SBP to make payments to the participating petrol pumps. Ogra would provide bank account numbers and other relevant details of petrol pumps to facilitate settlement. A detailed payment mechanism would be worked out jointly by the Ministry of Finance, Ministry of Energy (Petroleum Division) and Ministry of IT and Telecommunication.