The federal government on Monday decided to end the fuel subsidies provided to motorcyclists, small farmers and public transport earlier this year to offset the impact of rising fuel prices amidst the Iran war.
The seventh meeting of the National Steering Committee on Fuel Subsidy, chaired by Deputy Prime Minister and Foreign Minister Ishaq Dar, reviewed the rollout of existing subsidies and noted they were no longer necessary following a sharp decline in global fuel prices.
Last week, the government slashed petrol prices by Rs. 74/liter and diesel by Rs. 67/liter, bringing them down to Rs. 299/liter and Rs. 311/liter, respectively. The committee noted that the government had passed on the benefit of declining global prices to consumers and the subsidy was now unnecessary.
While appreciating the committee’s work, the deputy prime minister directed relevant officials to document the lessons learnt from the exercise and address gaps in data and delivery to strengthen any future initiatives aimed at improving public service delivery.
The government had introduced the subsidy program in March after global fuel prices surged due to Iran’s closure of the Strait of Hormuz, a vital shipping lane through which roughly a fifth of the world’s oil supplies pass.
Under the scheme, motorcycle, rickshaw and 800cc vehicle owners received subsidies ranging from Rs. 50-100/litre. Public and goods transport operators were provided monthly support of between Rs. 70,000 and Rs. 100,000, while small farmers received a diesel subsidy of Rs. 100/liter.
At their peak, petrol prices in Pakistan reached Rs. 458.40/liter and diesel hit Rs. 520.35/liter.