Targeted fuel subsidy may return if Gulf tensions persist

Pakistan's government indicated it might reinstate targeted fuel subsidies within days, with provincial support, if Middle East tensions escalate. This comes as the administration remains committed to its plan for petroleum price deregulation.

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If this matter [renewed US-Iran attacks] does not end in a few days, we will bring back the targeted subsidy mechanism that we previously used to prevent the price shock from reaching the people.

Petroleum Minister Ali Pervaiz Malik stated that if renewed US-Iran hostilities do not cease soon, the government will bring back the targeted subsidy mechanism previously used to shield the public from price shocks. He recalled that the prime minister had initially allocated Rs130 billion for fuel subsidies before involving provincial governments in the targeted approach. Malik acknowledged the difficulties faced by ordinary Pakistanis and noted that genuine relief would only come when the US-Iran conflict ends and global oil prices decrease.

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We have tied our hands ourselves and handed over a transparent system to the people.

Speaking to journalists after a Senate Standing Committee on Petroleum meeting, Malik defended the daily petroleum pricing mechanism, calling it transparent and designed to protect consumers from major price shocks that could result from weekly or fortnightly adjustments. He explained that Pakistan, operating under an International Monetary Fund program with limited financial resources, must recover legitimate fuel costs from consumers. The minister added that the Oil and Gas Regulatory Authority (Ogra) publishes its "transparent working" online. Senators provided varied reactions to the new pricing system, with some appreciating its transparency and others criticizing it as detrimental.

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Slow poison.