The government has moved to introduce a targeted subsidy on petroleum products through a technology-driven mechanism, as it operates within limited fiscal space.

The development was discussed at a high-level meeting on the petroleum products situation, chaired by Finance Minister Senator Muhammad Aurangzeb, on Friday at the Finance Division.

The meeting commenced with a detailed presentation by the Petroleum Division on the current status of petroleum products’ availability in the country, according to an official statement. It was noted that the fuel supply situation in Pakistan remains stable and adequate.

The Ministry of Information Technology and Telecommunication also gave a comprehensive presentation on proposed technological solutions to facilitate a targeted subsidy mechanism for petroleum products, with a focus on transparency and efficient delivery.

The provincial leadership shared their views on the prevailing situation and policy options. Chief Minister Sindh, Syed Murad Ali Shah, appreciated the efforts of the federal government in maintaining uninterrupted fuel availability, while emphasising the importance of behavioural measures to promote fuel conservation.

Punjab Senior Minister Marriyum Aurangzeb, representing the Government of Punjab, emphasised the need to develop multiple policy scenarios in response to the evolving petroleum price situation.

She stressed that any reduction in international petroleum prices should be effectively passed on to consumers and highlighted the importance of incorporating behavioural aspects into crisis management to ensure more sustainable consumption patterns.

Khyber Pakhtunkhwa Finance Minister Muzzammil Aslam lauded the efforts of Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, and Federal Minister for Petroleum, Ali Pervaiz Malik, for effectively managing the oil supply situation.

He noted that Pakistan’s management of petroleum supplies has remained comparatively better than that of several countries in the region.

Balochistan Minister for Finance and Mines and Mineral Development, Mir Shoaib Nosherwani, also shared his views during the meeting.

The Finance Division briefed the participants on the fiscal situation and noted that limited fiscal space is available, primarily confined to revenues from the petroleum levy. It was emphasised that any relief measures would need to be carefully calibrated to maintain macroeconomic stability.

In his remarks, Aurangzeb underscored that the current situation should be treated as an opportunity to undertake structural reforms rather than a constraint. He emphasised the importance of adopting data-driven decision-making, particularly in the areas of taxation and subsidy design, to ensure transparency, efficiency, and better targeting of relief.

The finance minister also highlighted the need to promote responsible consumption behaviour and ensure that policy responses remain fiscally prudent while maximising relief for the public.

The participants agreed to expedite efforts to finalise a targeted subsidy framework using technological solutions, while ensuring continued coordination between the federal and provincial governments.

The meeting was attended by Chief Minister Sindh, Syed Murad Ali Shah; Punjab Senior Minister Marriyum Aurangzeb, representing the Government of Punjab; Khyber Pakhtunkhwa Finance Minister Muzzammil Aslam; Balochistan Minister for Finance and Mines & Mineral Development, Mir Shoaib Nosherwani; Chief Secretaries of all four provinces; Federal Minister for Petroleum, Ali Pervaiz Malik; Federal Minister for Information Technology and Telecommunication, Shaza Fatima Khawaja; Federal Secretaries of Finance, Petroleum, and Information Technology & Telecommunication; as well as senior officials, including the Chairman NADRA.