Centre, provinces discuss mechanism for targeted petrol subsidy

ISLAMABAD: The federal and provincial governments on Wednesday held a consultative meeting to review a targeted subsidy framework for petroleum products.

According to an official handout, Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, chaired the high-level meeting at the Finance Division, in line with the directions of the President and the Prime Minister of Pakistan.

The meeting began with a detailed briefing by the Petroleum Division on the availability of petroleum products. Participants expressed satisfaction that the fuel supply across the country remains stable and adequate.

The Ministry of Information Technology and Telecommunication presented proposed technological solutions to implement a targeted subsidy mechanism, focusing on transparency and efficient delivery.

Provincial representatives shared their views on the current situation and policy options.

Chief Minister Sindh, Syed Murad Ali Shah, appreciated the efforts of the federal government in maintaining uninterrupted fuel availability, while emphasizing the importance of behavioral measures to promote fuel conservation.

Punjab Senior Minister Marriyum Aurangzeb, representing the Government of Punjab, emphasized the need to develop multiple policy scenarios in response to the evolving petroleum price situation.

She stressed that any reduction in international petroleum prices should be effectively passed on to consumers and highlighted the importance of incorporating behavioral aspects into crisis management to ensure more sustainable consumption patterns.

Khyber Pakhtunkhwa Finance Minister Muzzammil Aslam lauded the efforts of Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, and Federal Minister for Petroleum, Mr. Ali Pervaiz Malik, for effectively managing the oil supply situation. He noted that Pakistan’s management of petroleum supplies has remained comparatively better than that of several countries in the region.

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Balochistan Minister for Finance and Mines & Mineral Development, Mir Shoaib Nosherwani, also shared his views during the meeting.

The Finance Division briefed participants on the fiscal situation, noting that limited fiscal space is available, largely restricted to revenues from the petroleum levy. It stressed that any relief measures must be carefully calibrated to maintain macroeconomic stability.

In his remarks, the Finance Minister underscored that the current situation should be treated as an opportunity to undertake structural reforms rather than a constraint. He emphasized the importance of adopting data-driven decision-making, particularly in the areas of taxation and subsidy design, to ensure transparency, efficiency, and better targeting of relief.

He also highlighted the need to promote responsible consumption behaviour and ensure that policy responses remain fiscally prudent while maximizing relief for the public.

The participants agreed to expedite efforts to finalize a targeted subsidy framework using technological solutions, while ensuring continued coordination between the federal and provincial governments.

The meeting was also attended by Chief Secretaries of all four provinces, Federal Minister for Petroleum, Ali Pervaiz Malik; Federal Minister for Information Technology and Telecommunication, Shaza Fatima Khawaja; Federal Secretaries of Finance, Petroleum, and Information Technology & Telecommunication; as well as senior officials, including the Chairman NADRA.