By Staff Reporter
ISLAMABAD: The federal government is pressing provincial authorities to share the rising cost of imported fuel, in a bid to keep domestic petrol and diesel prices unchanged for consumers despite swings in global markets, according to people familiar with the discussions.
The outreach has centered on the two largest provinces, Punjab and Sindh, which are being asked to shoulder part of the fiscal burden the center has carried alone to hold retail prices steady. Senior officials, including the prime minister, have made the case directly in personal meetings and telephone calls, a senior government official said. The provinces have been told to review their own finances and report back after internal consultations on whether they can free up resources — or whether they would need to cut their annual development plans to contribute.
The official, who asked not to be identified discussing private deliberations, said the federal government is also urging all provinces to join a coordinated national push on austerity and energy conservation. That includes expanding virtual meetings, work-from-home policies and staggered attendance at government offices and educational institutions. While provinces have already begun some conservation efforts on their own, a unified approach is required, the official said.
The plan envisions tighter limits on air-conditioner use and greater car-pooling, enforced through a “carrot-and-stick” system backed by audited monitoring committees at both ministerial and provincial levels.The extent of provincial cooperation will help shape the next round of petroleum pricing decisions, the official added. International prices for crude, diesel and petrol have eased over the past two days. Even so, the gap between import costs and domestic prices under the existing formula stands at about 75 rupees a liter for petrol and 175 rupees a liter for diesel.
In Karachi, Sindh Transport Minister Sharjeel Inam Memon signaled his government’s readiness to back whatever steps the center ultimately takes to prevent fuel shortages. The province is already carrying out all federal directives and is putting in place additional safeguards to protect public supply and maintain adequate reserves, he said. “All possible steps are being taken to ensure public needs are met and fuel reserves are maintained. These measures will remain in place until the situation is fully under control,” Memon said in a statement. He added that Sindh would fully implement any nationwide lockdown ordered by the federal government.
Separately, the Ministry of Finance disclosed on Wednesday that it had transferred 27 billion rupees to the Oil & Gas Regulatory Authority to settle the first tranche of price-differential claims owed to oil marketing companies. The payment covers the two-week period in which the government kept petrol and diesel prices frozen even as international benchmarks climbed. The money was drawn from the newly created Prime Minister’s Austerity Fund after internal expenditure reductions across federal departments. The finance ministry said it is examining further cost-cutting measures to keep providing relief to consumers while staying inside the budget envelope and generating additional savings.
The underlying decision dates to March 14, when the petroleum division announced that the prime minister had approved holding high-speed diesel and motor-spirit prices steady. The government committed at the time to covering the full price differential for the marketing companies. The initial estimate for the March 14-20 period came to 23 billion rupees; that amount has now been released to Ogra. Total differentials for the broader period through March 27 are projected to reach about 69 billion rupees. The mechanism for verifying and auditing invoices from the companies was worked out jointly by Ogra and the finance ministry. Cabinet approval had already been secured for establishing the austerity fund, and the Economic Coordination Committee authorized the transfer of 27.1 billion rupees into it.
The moves come as Islamabad tries to balance consumer protection with fiscal discipline. By spreading the subsidy burden and tightening conservation rules, the government hopes to limit the hit to public finances without triggering a politically sensitive rise in pump prices.
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