Pakistan Mulls Targeted Fuel Subsidy Amid Middle East Tensions
The federal government of Pakistan may announce a targeted fuel subsidy if tensions in the Middle East continue to drive up global oil prices. According to Petroleum Minister Ali Pervaiz Malik, the government is closely monitoring the situation and will intervene if prolonged instability threatens consumers.
Malik said that if international tensions persist, the government will revive the previously used targeted subsidy mechanism to protect people from sudden fuel price shocks. The minister recalled that Prime Minister Shehbaz Sharif had allocated Rs130 billion for targeted fuel subsidies before provincial governments joined the initiative.
The new daily petroleum pricing system was introduced earlier this week, replacing the fortnightly price adjustment model. Under the new system, prices are determined using a seven-day rolling average of Platts international oil benchmarks, aiming to smooth out daily fluctuations and reduce the impact of sudden spikes caused by geopolitical events.