ISLAMABAD:
The government is working on a comprehensive package of quota-based fuel supply systems aimed at ending subsidies across the board.
A meeting was held at the Oil and Gas Regulatory System to finalize a gasoline distribution allocation plan through a quota system for customers with the objective of conserving energy supply.
The meeting was attended by officials from the IT Ministry, finance and petroleum divisions to finalize a plan.
The Ministry of IT, Finance, Petroleum, etc. held a joint meeting to finalize a quota-based fuel supply system.
During the meeting it was reported that the Ministries of Finance and Foreign Affairs are making parallel efforts regarding Iran and Saudi Arabia to manage the situation. The system is being accelerated to ensure consistency across all pumps and avoid operational discrepancies.
The government has claimed that it had provided a subsidy of Rs 69 billion to petrol and diesel consumers over the last two weeks and is now planning a direct subsidy for two- and three-wheelers.
Owners of four-wheeled vehicles may not qualify for the subsidy.
The meeting finalized a mobile app-based quota system for fuel for two-wheelers and three-wheelers, possibly including vehicles up to 800 cc, to ensure targeted subsidy to low-income strata and minimize petroleum consumption through price signals.
The application will help implement the direct subsidy system by allocating gasoline quotas. The system will be application-based and fully automated. A free pre-installed app will be provided for retail operators, while consumers will use a separate open app.
Hardware distribution
The government requires a minimum of two mobile phones per retail establishment to run the system. The IT Ministry is coordinating with manufacturers to provide specialized phones.
Initial costs are estimated at Rs 36,000 per unit, with a retail price of around Rs 72,000. Points of sale must deposit funds into a designated government account to ensure immediate delivery of the devices.
The account number will be communicated by Ogra.
Quota and Voucher Mechanism
Vehicle-based quotas (e.g. 20 liters for motorcycles) will be linked to the user’s application using registration number and CNIC. Users will generate a digital voucher through the application.
Retailers will scan/enter the coupon into their app; the system will automatically validate the available quota (for example, if a user requests 20 liters but has a quota of 15 liters, only 15 liters will be dispensed).
This mechanism is similar to the previously successful Ramadan Package model.
Government subsidies and prices
The government is providing subsidies for 2 and 3 wheelers.
Retailers will dedicate specific dispensers or nozzles for 2 and 3 wheelers to facilitate the distribution of subsidized fuel. It remains to be clarified whether subsidies for 4-wheeled vehicles will be maintained or eliminated.
The government has guaranteed timely prices to protect retailers from licensing issues and price increases, with the aim of avoiding the 2020 crisis. 5. Presentation of the focal person by the OMCs.
While OGRA already has point-of-sale information, oil marketing companies (OMCs) are required to submit details of the focal person for each retail site, including the name of the focal person, CNIC and contact mobile number.
Implementation and monitoring
Retailers should share focal person details and contact numbers immediately for coordination. The IT Ministry will provide video demonstrations and tutorials on the functioning of the system.
In the event of emergencies, a waiver system is available for approvals through a designated process. The government faces critical conditions regarding fuel supply chains.
