Rs100 Per Litre Fuel Relief Proposed For 11.8 Million Pakistanis

The Petroleum Division has proposed a Rs75 billion fuel subsidy programme for approximately 11.8 million users of motorcycles, rickshaws and cars with engine capacities of up to 800cc. The proposal will now be presented to the Economic Coordination Committee (ECC) for consideration and approval.

Sources familiar with the development said the Petroleum Division had circulated the proposal to the Finance Division, Ministry of Information Technology and Telecommunication (MoITT), Oil and Gas Regulatory Authority (OGRA) and State Bank of Pakistan (SBP) to obtain their feedback before submitting it to the ECC.

The sources clarified that the proposed programme cannot be launched until the required approvals are secured, including permission for the necessary financial allocation.

Under the plan, around 10 million motorcycle users, 800,000 three-wheeler users and one million owners or users of cars with engine capacities of up to 800cc would qualify for assistance. The total number of expected beneficiaries is therefore estimated at 11.8 million.

The proposed subsidy would amount to Rs100 per litre. Motorcycle and three-wheeler users would be entitled to a maximum of 20 litres of petrol per month, resulting in monthly support of up to Rs2,000 per beneficiary.

Owners or users of cars with engines of up to 800cc would qualify for a monthly limit of 30 litres, allowing them to receive relief of up to Rs3,000 each month.

According to the sources, the scheme would have an estimated monthly cost of Rs24.6 billion. This includes Rs20 billion for motorcycle users, Rs1.6 billion for three-wheelers and Rs3 billion for small-car users.

For the proposed three-month implementation period, the Petroleum Division has requested Rs75 billion through a Technical Supplementary Grant (TSG).

The estimated number of motorcycle beneficiaries was calculated after assessing the overall motorcycle population and the number of vehicles still in operation. Of approximately 34 million motorcycles, nearly 40% are believed to be retired, leaving around 20.6 million operational vehicles. Based on the experience of an earlier relief programme, the number of eligible beneficiaries has been projected at 10 million.

The subsidy would be distributed through a digital Fuel Pass System (FPS), which would be developed and administered by MoITT. The platform would handle user registration, fuel-token issuance, verification, transaction recording and payment settlement.

The proposed controls would include the user’s Computerised National Identity Card (CNIC), vehicle registration number and mobile phone number. The system would provide relief to the individual user rather than the vehicle owner, with only one vehicle permitted to be linked to each user.

MoITT would maintain electronic transaction records and submit daily reports identifying the fuel tokens used at each participating petrol station. The Petroleum Division would rely on these records to authorise payments to petrol pumps through the SBP.

OGRA would provide information relating to dealerships and bank accounts, while the Finance Division, Petroleum Division and MoITT would jointly finalise the payment process.

The proposal also includes a separate Rs1.73 billion TSG for MoITT to establish and operate the Fuel Pass System. This allocation would cover technology infrastructure, call centres, SMS facilities, software development and deployment, registration, token generation, validation, settlement and independent verification.

The sources said funding would be routed through the Petroleum Division, while SBP would release payments to designated petrol stations based on authorised daily digital transaction records.

Under the proposed arrangement, the digital transaction log would serve as the main record for payment processing and auditing. Third-party audits would also use these electronic records, while OGRA would establish safeguards to prevent possible abuse by oil marketing companies, dealers and other parties.

The scheme is intended to provide targeted assistance to motorcycle, rickshaw and small-car users facing rising fuel costs following the recent increase in petrol prices.

However, the proposal remains under consideration and has not yet received approval from the ECC.