ISLAMABAD: The federal government may restore targeted fuel subsidies in coming days if the international crude oil prices remain very high due to the Middle East tensions.
Petroleum Minister Ali Pervaiz Malik said the government would revive the targeted subsidy programme if the renewed US-Iran conflict continued. He added that provincial governments could again help finance the initiative to protect vulnerable consumers.
Previously, the federal government allocated Rs130 billion for targeted fuel subsidies. Later, provincial governments joined the programme to expand financial support for lower-income households facing higher fuel costs.
Government defends daily fuel pricing
Meanwhile, Malik defended the shift to daily petroleum price revisions despite criticism from several quarters. He said the system gradually transfers international price changes to consumers and reduces sudden price shocks.
Addressing the Senate Standing Committee on Petroleum, the minister said the government had depoliticised fuel pricing. He added that the Oil and Gas Regulatory Authority now determines prices using a transparent formula linked to global market trends.
OGRA Chairman Nabeel Awan explained that daily prices rely on a seven-day rolling average of Platts international benchmarks. Therefore, global price fluctuations spread over several days instead of affecting consumers immediately.
Senate panel seeks further reforms
The Senate committee also expressed concern over the tax burden on petroleum products, while dealers highlighted operational challenges from frequent price revisions.
Furthermore, the committee directed OGRA to consult stakeholders and submit recommendations.
Meanwhile, a review panel endorsed daily pricing mechanism and proposed supply chain digitization. The panel also recommended an IFEM review, and changes to oil marketing regulations.
