Centre, provinces close ranks on targeted relief
People wait for their turn to get fuel at a petrol station in Peshawar. Photo: Reuters/ File
In a rare display of coordinated fiscal firefighting, the Centre and provinces have moved in lockstep to roll out a sweeping targeted subsidy regime, shifting from blanket relief to precision support, as the country grapples with a steep fuel price shock driven by global turmoil.
With petrol surging to Rs458.40 per litre and high-speed diesel to Rs520.35, the federal government, after consultations with provincial leadership, has offloaded the execution of relief onto provinces, which will administer subsidised fuel quotas to motorcyclists, farmers and transporters at an estimated monthly cost of Rs6570 billion.
Finance Minister Senator Muhammad Aurangzeb, flanked by Petroleum Minister Ali Pervaiz Malik, said the leadership has decided "that we are announcing a targeted subsidy programme so that relief is not a blanket one, but reaches those who are truly deserving".
Relief architecture: who gets what
Under the federal framework, a Rs100 per litre subsidy will be extended to two-wheeler motorcycles, capped at 20 litres per month for three months. Small farmers will receive Rs1,500 per acre as a one-time support during the harvesting season, when diesel consumption peaks.
Freight vehicles will get Rs100 per litre support, alongside fixed monthly assistance of Rs70,000 for trucks, Rs80,000 for large transport vehicles and Rs100,000 for public service buses, initially for one month, subject to review.
Pakistan Railways will also receive support to keep fares affordable for low-income passengers.
Aurangzeb said the evolving global energy landscape demanded "careful resource management," adding that the government would review the measures monthly while ensuring stability in essential sectors.
Provinces step in
Meanwhile, the provinces have pooled nearly Rs200 billion over three months under their NFC shares, with Punjab contributing around Rs100bn, Sindh Rs5152 billion, Khyber Pakhtunkhwa Rs15 billion and Balochistan Rs89 billion.
Punjab alone is expected to spend Rs35 billion per month, covering 22 million bikers, over 765,000 transport vehicles, and more than one million farmers.
Sindh will extend support to 67 million bikers through digital transfers of Rs2,000 per month, alongside assistance to farmers via Hari Cards.
Khyber-Pakhtunkhwa has already entered the implementation phase, offering Rs2,000 monthly to over 1.6 million bikers, while Balochistan faces data constraints, with limited vehicle registration coverage and reliance on BISP data for outreach.
Both Punjab and Sindh had pushed for passing on international fuel prices to consumers, arguing that targeted subsidies would allow more efficient support to vulnerable segments rather than across-the-board relief.
'Difficult decision'
In Karachi, Sindh Chief Minister Murad Ali Shah defended the difficult choices, saying the government had to take "difficult decisions" and noting that blanket subsidies had benefited the "rich and poor alike".
He said a "one-month regimen, which has four components" had been developed jointly with the Centre.
Under this plan, motorcyclists will be "shielded from the hike," with Rs2,000 monthly transfers beginning between April 1520.
Farmers with landholdings under 25 acres will receive Rs1,500 per acre, with the chief minister expressing confidence that the subsidy would "compensate for the cost of diesel".
On the other hand, Punjab unveiled a parallel but more expansive relief push. Chief Minister Maryam Nawaz announced free public transport across intra-city routes, covering metro, bus and train services, while also rolling out fuel subsidies for bikers and farmers.
"Citizens will not have to purchase tickets while travelling on public transport - Orange Line Train, Metro Bus Service, Speedo Bus and Green Electric Bus," she said, calling it a major relief measure under Prime Minister Shehbaz Sharif's austerity programme.
"By providing relief worth billions of rupees within a month, PM Shehbaz Sharif has made a sincere and strong effort to protect the public from hardships," she added. "We will not leave the public alone in difficult times."
Islamabad
In the federal capital, public transport has also been made free for 30 days. Interior Minister Mohsin Naqvi said the government would bear the cost of Rs350 million.
Meanwhile, a mobile app, expected to go live next week, will manage fuel quotas through CNIC-linked registrations and digital vouchers.
The Ministry of IT has already ordered 24,000 mobile devices for distribution across 12,000 petrol stations, with oil marketing companies footing the bill.
Each station will be equipped with two dedicated nozzles for subsidised fuel, while real-time monitoring by OGRA will ensure compliance. The scheme will be limited to two-wheelers, with small cars and three-wheelers excluded.