Pakistan's government is implementing fuel subsidies for over 9 million low-income individuals as escalating energy prices, driven by the U.S.-Iran conflict, place additional strain on the nation's economy.
The program, approved by Prime Minister Shehbaz Sharif last month, targets motorcycle riders, rickshaw operators, and owners of small cars, many of whom rely on their vehicles for work and daily commutes. The initiative aims to provide fuel at pre-conflict prices.
Fuel prices in Pakistan have surged by more than 50% since the onset of the U.S.-Iran war, exacerbating the existing challenges of high inflation and increasing the cost of transportation, food, and other essential goods. This situation has raised concerns about potential anti-government protests.
The subsidies were announced following a threat by Jamaat-e-Islami, a prominent Islamist political party, to march on the capital to demand government reductions in taxes on petrol and diesel.
Petroleum Minister Ali Pervaiz Malik stated that over 9 million people are currently benefiting from the program. Eligible motorists receive a text message token, which they present at participating gas stations. Staff then verify eligibility before applying the discount.
The amount and frequency of assistance vary based on vehicle type. Users of motorcycles and three-wheelers are eligible for a weekly discount of 500 Pakistani rupees (approximately $1.79), with a limit of four tokens per month, totaling a maximum monthly assistance of 2,000 rupees ($7.14).
Owners of cars with engines up to 800 cubic centimeters can receive a discount of 100 rupees (36 cents) per liter on up to 10 liters of gasoline (2.6 gallons) every 10 days. They are permitted three tokens per month, potentially saving up to 3,000 rupees ($10.71).
Amir Shahzad, a resident of Islamabad, commented that the subsidy is sufficient for his daily commute but noted that travel to other cities would necessitate purchasing fuel at market rates.
Pakistan's economy is heavily reliant on loans from the International Monetary Fund, which has advocated for the reduction of subsidies on various goods, including wheat.