The government says it can keep its petrol relief scheme running for up to 10 months. But the extra money is not approved yet.
Petroleum Minister Ali Pervaiz Malik said on Sunday that the government would move Rs 400 billion to Rs 500 billion from its budget if the subsidy has to run that long. Users already in the scheme see no change for now.
He spoke at a ceremony in Lahore. He said the Prime Minister wants any fall in world oil prices passed on to the public. He also said more than six million people have registered motorcycles and cars for the Rs 100-per-litre relief.
Malik also addressed his recent remark that petrol could reach Rs 1,000 a litre. He said it was taken wrongly. He was talking about how hard it is to control prices in a shortage, and he said Pakistan will not face one.
Confirmed and not confirmed
Confirmed (from the minister’s remarks):
- The government is willing to run the subsidy for up to 10 months if needed.
- The money would come from cuts elsewhere in the budget.
- More than six million people have registered.
Not confirmed:
- Approval. A fresh Rs 500 billion subsidy has not been approved. None of the reports I reviewed mention an ECC or cabinet decision.
- What “10 months” means. The Express Tribune reports “up to 10 months.” Daily Independent reports “another 10 months.” The two readings are not the same.
The Cost Figures Do Not Match
The Petroleum Division first sought Rs75 billion to run the scheme for three months. That is about Rs25 billion a month. The minister had earlier put the monthly cost at Rs25–30 billion.
On Sunday, Malik said the government spends about Rs35 billion to Rs40 billion a month. The reports do not explain the gap.
A quick calculation by Pakbiz: at Rs 35–40 billion a month, 10 months would cost Rs 350–400 billion. Rs 500 billion over 10 months works out to Rs 50 billion a month.
The Petroleum Division estimated 11.8 million beneficiaries. Six million registrations is roughly half of that.
