The federal government has agreed in principle to consider expanding its targeted subsidy on petroleum products, including diesel and up to five million more beneficiaries, sources told ProPakistani.
The development follows talks between Prime Minister Shehbaz Sharif and Jamaat-e-Islami (JI) chief Hafiz Naeem ur Rehman at the Prime Minister’s House.
If the technical committees of both sides build on the emerging consensus, petroleum products could become Rs. 30 to Rs. 40 per litre cheaper for eligible beneficiaries, sources said.
Targeted vs Blanket Subsidy
The type of subsidy remained the main point of disagreement during the negotiations. The government argued that targeted relief was necessary under the International Monetary Fund (IMF) program.
It said a blanket subsidy could put the programme at risk and would benefit wealthy and low-income consumers alike.
Instead, the government has offered to add up to five million more consumers to the existing petrol subsidy scheme. It is also considering bringing more older models of motorcycles and vehicles under the programme.
JI Pushes for Diesel Relief
JI insisted that diesel must also be covered, as agriculture and other key sectors rely heavily on it. The party said excluding diesel hurts farmers and raises costs across the economy.
In response, the government indicated that diesel could also be included in the targeted programme to an appropriate extent.
Sources added that the government has already cut the price of locally produced diesel by Rs. 32 per litre by delinking it from international prices, following pressure and negotiations by JI.
Both technical committees will continue working on the framework. The final scope, eligibility criteria, and subsidy amounts will depend on the outcome of these talks.
Earlier, Hafiz Naeem said the prime minister had asked for 7 to 10 more days to address JI’s demand to abolish the petroleum levy.
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