Earn more, pay more: Petrol price in Pakistan may be linked to income soon

Fuel prices have steadily climbed in Pakistan, a country whose economy is in utter shambles. Taxes and energy prices have been increased in recent times while Pakistan looks towards the International Monetary Fund or IMF for a $6.5 billion loan package. But the inflation and rising prices of essentials have hit people at large, prompting the government here to PKR 50 subsidy on each litre of petrol for low-income people.

The move to offer subsidy to people from low-income group is aimed at providing relief to people most in need. As such, the decision was followed with another decision to double the subsidy to PKR 100 per litre for those on two-wheelers, rickshaws and cars of up to 800cc. According to the country's Minister of State for Petroleum Dr Musadik Malik, the said subsidy would be applicable on 21 litres of petrol for families that fall in the low-income slab. “On the directions of Prime Minister Shehbaz Sharif, subsidy on petrol prices, under the petrol relief scheme, has been enhanced to PKR100 from PKR 50," said Malik, adding that those on two-wheelers will only get up to three litres of fuel in one go. “The prime minister has ordered for implementing the petrol relief scheme within six weeks."

Interestingly, Dawn reports that the IMF was not consulted before these subsidies were officially announced. There is also talk now that fuel prices could see upward revisions. At the time of filing of this report, a litre of petrol was at PKR 272 or ₹79.83.

There is some speculation now that those in larger passenger vehicles of a certain engine capacity may soon be asked to pay more for each litre of fuel purchased. This, however, has not been confirmed by any official channels of the country's government.