The government decides to end fuel subsidies after the sharp drop in global oil prices

Due to a sharp drop in global fuel prices, the government decided on Monday to suspend fuel subsidies given to motorcyclists, small farmers and public transport.

The development comes after recent reductions in oil prices, under which petrol was reduced by Rs 74 per liter and diesel by Rs 67 per liter, reducing them to Rs 299 per liter and Rs 311 per liter respectively, following a drop in the international market after the United States and Iran reached an agreement to end a conflict that had lasted for more than three months.

The decision was taken during the seventh meeting of the National Steering Committee on Fuel Subsidies, chaired by Deputy Prime Minister and External Affairs Minister Ishaq Dar.

The committee reviewed the implementation of fuel subsidy for motorcyclists, small farmers, public transport and goods transport in all provinces, Gilgit-Baltistan and Azad Jammu and Kashmir.

Noting the sharp decline in global fuel prices and that the benefit had already been passed on to consumers, the committee agreed to suspend the subsidy, with the approval of the prime minister.

While appreciating the work of the committee marked by sustained inter-provincial coordination, the deputy prime minister directed that lessons learned from the exercise be documented and gaps in data and delivery be addressed to strengthen future initiatives aimed at improving public service delivery.

Read also: Government disburses Rs 38 billion in fuel subsidy

The meeting was attended by SAPM Tariq Bajwa, Federal Secretaries Petroleum and IT, Governor State Bank of Pakistan and senior representatives of all provinces, Gilgit-Baltistan and Azad Jammu and Kashmir.

Following the rise in the price of oil in the world market following the conflict between the United States and Iran, the government significantly increased the prices of petroleum products after initially deciding to absorb the burden.

At one point, petrol prices reached Rs 458 per liter in April this year. However, days later, the prime minister announced an immediate reduction of Rs 80 per liter in petroleum tax to provide relief to the public.

In announcing the relief, the prime minister also unveiled a fuel subsidy package aimed at protecting the public from rising fuel costs caused by tensions in the Gulf region.

Under that initiative, motorcyclists would get a subsidy of Rs 100 per litre, while goods transport, public transport and cargo vehicles would also be supported for a month.

Under the same relief measures, small trucks received Rs 70,000 per month, large trucks Rs 80,000 and public transport buses Rs 100,000 as monthly subsidies.

The initiative also included support to smallholder farmers, who were provided assistance of Rs 1,500 per acre.