Government May Bring Back Targeted Fuel Subsidy
The federal government has said it may restore the targeted fuel subsidy system if tensions in the Middle East continue and global oil prices remain unstable. Officials also confirmed that the new daily petroleum pricing system will continue despite the uncertainty.
Minister Explains Government’s Position
Federal Minister for Petroleum Ali Pervaiz Malik spoke to reporters after a meeting of the Senate Standing Committee on Petroleum. He said the government would consider bringing back the targeted subsidy model if the conflict between the United States and Iran continued.
He recalled that the prime minister had previously approved a fuel subsidy worth Rs130 billion. Provincial governments later shared part of the financial burden.
IMF Conditions Limit Price Relief
The minister said the government understands the financial pressure on people. However, Pakistan has limited financial resources and must meet the conditions of the IMF programme.
He explained that the government has to include the actual cost of petroleum products in retail prices. Keeping fuel prices below market levels creates a financial burden that the government or another institution must bear.
Daily Fuel Prices Aim to Improve Transparency
Ali Pervaiz Malik said the government introduced daily fuel pricing to make the system more transparent. He added that this method passes changes in global oil prices to consumers gradually instead of causing sudden price shocks.
OGRA Explains New Pricing Formula
Officials from OGRA told the committee that they calculate petroleum prices using the seven-day average of international oil markets.
They said this approach helps transfer global price changes to consumers in a balanced and predictable way.
Senators Raise Questions on New System
Committee members shared different opinions about the new pricing mechanism. Some senators welcomed the system because it improves transparency.
Others raised concerns about frequent price changes, taxes on petroleum products, and the challenges faced by fuel dealers.
Government Reviews More Energy Reforms
A government committee, formed on the prime minister’s instructions, also reviewed several proposals related to the petroleum sector.
The committee discussed digitalising the fuel supply chain, defining the responsibilities of oil marketing companies, improving the IFEM system, reviewing the windfall tax, and introducing wider sector reforms.
The government says these reforms will strengthen transparency, improve competition, increase oversight, and better protect consumers.