Asif Hassan—AFP
Prime Minister Shehbaz Sharif on Sunday announced a “petrol relief” subsidy for low-income consumers, aimed at reducing pressures on an inflation-stricken populace as the country continues efforts to revive a stalled International Monetary Fund (IMF) program.
The premier announced the package after chairing a meeting in Lahore to review relief measures being provided to the public ahead of Ramzan. Under it, Rs. 50/liter subsidy would be provided to low-income groups, primarily Pakistanis who use motorcycles, rickshaws, and 800cc and smaller cars. While Sharif did not specify any date for the launch of this subsidy, he said it would be initiated “soon,” adding a comprehensive strategy would be chalked out with the cooperation of relevant departments to ensure its effective implementation. “The government is making effort for all possible help to the poor people despite its economic difficulties,” he added.
Last week, the Finance Division notified a Rs. 5/liter increase to petrol prices and a Rs. 13/liter hike to diesel tariffs, angering a public already reeling from record-high inflation triggered by the withdrawal of all subsidies and a persistent currency devaluation that has significantly reduced the purchasing power of common citizens. Withdrawal of subsidies is a key prior condition of the IMF for reviving the stalled bailout, and it remains unclear if the global lender has signed off on the new fuel subsidy.
Pakistan’s economy is on the brink of collapse, with record-high inflation, record-low foreign exchange reserves and a looming balance of payments crisis. Despite this, there are few indications of course correction from the government, which continues to have one of the largest cabinets in recent memory. Authorities have also failed to implement austerity measures, including a proposal to reduce operational hours of commercial markets and restaurants, aimed at conserving energy.
During the meeting on Sunday, Minister of State for Petroleum Musadik Malik briefed the participants about the strategy for providing petroleum subsidies to the low-income segment of society, maintaining it did not impact the IMF program.
Earlier, as part of relief measures aimed at facilitating the impoverished, the prime minister had announced free flour for residents of Islamabad and Punjab during Ramzan.