Pakistan Provides Fuel Subsidies to 10 Million Low-Income Citizens

The Government of Pakistan has provided fuel subsidies to more than 10 million low-income citizens to mitigate energy price spikes caused by the war between the United States and Iran. Prime Minister Shehbaz Sharif approved the allocation of 75 billion rupees ($268 million) for the initial three months of the program, which offers a discount of 100 rupees per litre to motorcycle riders, rickshaw operators, and owners of cars with engines up to 800cc.

Beneficiaries receive digital tokens via text message to purchase gasoline at prewar prices. The initiative follows a surge in fuel costs of more than 50% since the conflict began on February 28. The program was launched partly to stave off social unrest after the Islamist political party Jamaat-e-Islami threatened to march on Islamabad to demand petrol and diesel tax cuts.

While the government expanded the program's reach, the International Monetary Fund has urged that relief be capped at three months and routed through the Benazir Income Support Programme. Despite these pressures, Pakistan recently reached a staff-level agreement with the IMF to unlock approximately $1.2 billion as part of a larger bailout and sustainability facility. Critics argue the relief remains minimal and excludes those relying on public transport or diesel vehicles.