'Sasta Petrol Sasta Diesel' scheme to benefit Pakistan's lowest income group: Miftah

Finance Minister Miftah Ismail on Saturday revealed that the government’s Sasta Petrol Sasta Diesel scheme will benefit the lowest 37% of the income group in Pakistan whose household earnings are less than Rs40,000 per month.

In his address to the nation on Friday, Prime Minister Shehbaz Sharif had announced a relief package under which the government will provide Rs2,000 to 14 million households to buy petrol.

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While speaking at a press conference on Saturday, Ismail said the scheme will enable recipients to purchase petrol and diesel, after the government sharply hiked their prices on Thursday by Rs30 per litre. He said the scheme would cost the nation Rs28 billion and benefit 84 million Pakistanis.

“The recipients of Benazir Income Support Programme (BISP) will be included among the beneficiaries and they will receive double payments initially but later, their payments would be clubbed to a single instalment,” he said.

Ismail said married women and widows from households earning less than Rs40,000 per month should send their CNIC numbers to 786 from June 1 onward in order to register for the programme. BISP recipients will be registered automatically.

Citing statistics, Ismail noted the average income for households earning less than Rs40,000 in Pakistan is Rs31,373.

“The government is covering at least 5% of the household income through the relief package,” he said. “According to the Pakistan Bureau of Statistics, people spend 5% of their earnings on transportation.”

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He shared that the relief package would be incorporated in the upcoming budget for the fiscal year 2022-23. The minister also underlined that the payout under the scheme would reduce when petrol prices fall in Pakistan.

“Earlier, we were advised to incentivise motorcycle owners only, however, there are several families that do not even own a bike hence, we decided to cover all households earning less than Rs40,000 per month.”

He pointed out that Pakistan utilised 20 million litres of petrol per month and a Rs30 per litre increase would save a massive amount for the government. As per the data from the Ministry of Energy (Petroleum Division), 85% of total petrol is consumed by 40% of the richest households in Pakistan as luxury cars utilised a higher amount of petrol, he said.

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“Therefore, the subsidy on fuel was benefiting rich more than poor,” he said.

He also said that the International Monetary Fund (IMF) wanted the removal of fuel subsidy and imposition of a levy worth Rs30 per litre which would have taken petrol price to Rs260 per litre and diesel rate to Rs300. He also stated that the previous leadership agreed upon this condition.

“We will not impose tax on fuel and we are only recovering partial cost of subsidy right now,” he said. “Our hands are tied by the deals made by the past government.”

He was of the view that petrol prices should not increase on June 1 and highlighted that at present, there was no summary to increase the electricity price as well.

He was optimistic that Pakistan would receive the remaining $3 billion from IMF. Moreover, he held the view that $3 billion deposit from Saudi Arabia would be rolled over.

“We are meeting IMF’s conditions to open doors for further assistance from the world,” he said.