Centre, provinces move toward targeted fuel subsidies amid rising costs

ISLAMABAD: In response to escalating fuel prices, the federal and provincial governments on Tuesday held a high-level meeting to formulate a targeted petroleum subsidy mechanism aimed at supporting vulnerable segments of society while maintaining fiscal discipline.

The meeting was chaired by Muhammad Aurangzeb, Federal Minister for Finance and Revenue, and brought together key stakeholders from across the country. Among those in attendance were Maryam Nawaz Sharif, Chief Minister Punjab, and Murad Ali Shah, Chief Minister Sindh, who joined virtually, along with Sarfraz Bugti, Chief Minister Balochistan, and Muzzammil Aslam, KP Finance Minister.

Federal ministers, including Ali Pervaiz Malik (Petroleum), Ahad Khan Cheema (Economic Affairs), and Shaza Fatima Khawaja (IT & Telecom), along with senior officials from relevant ministries and provincial administrations, also participated in the deliberations.

Opening the session, Aurangzeb said the meeting was part of ongoing consultations guided by the country’s top leadership to evolve a coordinated and sustainable approach to petroleum pricing and subsidy reforms. He stressed the importance of collaboration between the federation and provinces to ensure effective policy implementation.

Participants held detailed discussions on shifting away from blanket subsidies toward more targeted and efficient support systems. Provincial representatives shared proposals tailored to their administrative capacities, available data systems, and local socioeconomic dynamics.

The forum explored multiple mechanisms to ensure subsidies reach deserving groups, including the use of digital platforms, existing databases, and cash transfer systems. Emphasis was placed on designing a framework that balances public relief with fiscal responsibility while avoiding market distortions.

Transparency, accountability, and robust governance structures were highlighted as essential components of any future subsidy programme. The participants also underscored the need for a unified national policy with flexibility for provinces to implement solutions based on their specific needs.

It was agreed that a working framework outlining the contours of a targeted subsidy model would be developed and circulated among stakeholders for further input. Provinces will continue refining their proposals to help reach a consensus-driven and practical solution.

Concluding the meeting, the finance minister appreciated the constructive engagement of all participants and reaffirmed the government’s commitment to shielding vulnerable groups from economic pressures while ensuring overall stability.