Home Latest News Government Aims for Rs. 100/liter Fuel Discount for Motorcycles, Small Cars

Government Aims for Rs. 100/liter Fuel Discount for Motorcycles, Small Cars

IMF says it is seeking further details on the scheme and will discuss it with authorities

by Staff Report

File photo, courtesy PID

State Minister for Petroleum Musadik Malik on Monday announced the government will provide a Rs. 100/liter discount on petrol for motorcycles and cars less than 800cc, adding that under the scheme, the rich will pay more to provide relief to the poor.

“The initial working was to provide petrol at Rs. 50 less than the OGRA [Oil and Gas Regulatory Authority]-notified rate to the people having motorcycles and cars [up till 800cc], but on Sunday night, the prime minister conveyed to us give petrol to the people Rs. 100 less than the notified rate,” he told a press conference in Lahore. “[Under the scheme] petrol for the rich people having cars/vehicles of over 800cc would be costlier, as the objective is to help a majority of poor people—210 million of the total 220 million population of the country,” he said, adding that giving petrol at higher tariffs to the rich would help the government “give fuel to the poor on cheaper rates.”

Comparing the scheme to existing slabs for gas and electricity, he noted that costs for the rich and the poor had already been separated with effect from Jan. 1. “The gas bill of the poor will be much less than the rich,” he said, noting that the gas consumption per unit for the rich would be charged roughly a fourth higher than that charged to the poor. “The target subsidy on the electricity is already in place, as those using electricity up to 400 units are receiving cheaper bills,” he added.

Stressing that the prime minister had granted his ministry six weeks to implement the scheme, he said preliminary work had been completed and the government had a plan on how to achieve it in a targeted manner. The government, he said, had already started collecting data about people with motorcyles and small cars through vehicle registration, national identity cards and mobile phones. He clarified that an initial plan had called for the provision of discounted fuel cards, but said this was proving very costly.

“Now it has been decided to use EasyPaisa, JazzCash etc. services,” he said, adding that people wishing to buy discounted fuel would receive a text message through which they could register themselves and get a code that would be provided to petrol stations. “The monthly quota for those having bikes would be 21 liters, while it would be 30 liters—a full tank—for small cars,” he said, adding that limits would also be placed on how much discounted fuel could be purchased in a 24-hour period. People wishing to buy fuel beyond their allocated amount, he said, would have to pay the higher values.

On questions about funding for the discount, he said an escrow account would be opened in a bank and the additional cost incurred by the rich would be deposited in it and be used to pay for the cheaper fuel being provided to the poorer segments of society.

IMF concerns

Speaking with Bloomberg, International Monetary Fund (IMF) resident representative for Pakistan Esther Ruiz Perez said the government had not consulted the lender before announcing the discount. “Fund staff are seeking greater details on the scheme in terms of its operation, cost, targeting, protections against fraud and abuse, and offsetting measures, and will carefully discuss these elements with the authorities,” she said.

Related Articles

Leave a Comment