Pakistan's government has extended fuel subsidies to more than 9 million low-income people as the U.S.-Iran war pushes up global energy prices, officials said Tuesday.
Information Technology Minister Shaza Fatima Khawaja said the program was introduced to reduce the financial burden on millions of people as geopolitical tensions in the region drove fuel prices higher.
"We have ensured the process remains seamless and agile for citizens," Khawaja said, describing the initiative as Pakistan's first nationwide technology-based system for delivering targeted fuel subsidies.
Rising petrol and diesel prices have added to the pressure on the cash-strapped country, which is already dealing with high inflation. Higher fuel costs have increased transportation and food expenses and other living costs, fueling concerns about possible anti-government protests.
Approved by Prime Minister Shehbaz Sharif last month, the program provides fuel discounts to eligible motorcycle riders, rickshaw operators and small-car owners, many of whom rely on their vehicles for work and daily commuting.
The subsidies were announced after Jamaat-e-Islami, one of Pakistan's major Islamist political parties, threatened to march on Islamabad to demand cuts in taxes on petrol and diesel.
Fuel prices in Pakistan have increased by more than 50% since the United States and Iran went to war earlier this year, adding to the financial strain on households already struggling with the rising cost of living.
Sharif's government says the subsidy program is aimed at helping low-income motorists purchase gasoline at prices similar to those before the war.
Petroleum Minister Ali Pervaiz Malik said more than 9 million people were benefiting from the scheme. Under the system, eligible motorists receive a token via text message and present it at participating fuel stations, where staff verify their eligibility before applying the discount.
According to the Ministry of Information Technology and Telecommunication, the amount and frequency of assistance depend on the type of vehicle.
Motorcycle and three-wheeler users receive a discount of 500 rupees ($1.79) per week, with a maximum of four tokens a month, allowing them to receive up to 2,000 rupees ($7.14) in monthly assistance.
Owners of cars with engines of up to 800 cubic centimeters are eligible for a discount of 100 rupees (36 cents) per liter on up to 10 liters of gasoline every 10 days. They can receive up to three tokens a month, providing maximum savings of 3,000 rupees ($10.71).
Amir Shahzad, an Islamabad resident, said the subsidy was enough to cover his daily commute between home and work.
However, he added, "if I need to travel to another city, I will have to purchase petrol at the prevailing market price."
Pakistan remains heavily dependent on loans from the International Monetary Fund, which has called on Islamabad to reduce subsidies on wheat and other commodities.