Pakistan Fuel Quota System: New App-Based Subsidy for Motorbikes & Cars?
ISLAMABAD – The Pakistani government is finalizing a mobile application-based fuel quota system for two- and three-wheel vehicles, potentially extending to cars up to 800cc, in an effort to target fuel subsidies and curb consumption amid economic pressures and regional instability. The system, developed by the Oil and Gas Regulatory Authority (Ogra) in collaboration with the Ministries of Finance, Petroleum, and Information Technology, aims to automate fuel distribution and minimize potential misuse.
The initiative comes as Pakistan navigates a challenging economic landscape, compounded by the ongoing conflict in the Middle East and its impact on global oil prices. According to officials, the government is facing critical conditions regarding fuel supply chains, with demand remaining robust despite a strained foreign exchange position. For the past two weeks of unchanged petrol and diesel rates, the financial burden on the government is estimated at Rs70 billion.
The quota system will operate through two mobile applications – one for consumers and a pre-installed version for retail operators. Users will register via their vehicle registration number and Computerised National Identity Card (CNIC) to generate digital vouchers, which will be scanned or entered by retailers. The system will automatically validate available quotas, preventing the dispensation of fuel exceeding allocated limits, mirroring a previously successful model used during Ramazan.
To facilitate the rollout, the Ministry of Information Technology is coordinating with cellular phone manufacturers to provide specialized mobile phones to petrol stations at an estimated cost of Rs36,000 per unit, with a retail price of around Rs72,000. Retailers are required to deposit funds into a designated government account, details of which will be communicated by Ogra, to secure the delivery of these devices.
Oil marketing companies (OMCs) will be required to appoint focal persons at each retail site, providing their contact details to Ogra for 24/7 monitoring and consumer complaint resolution. These focal person details will also be shared with the petroleum division and OMCs themselves.
The government is still debating whether to extend the subsidy program to four-wheel vehicles. A key concern is preventing a repeat of the 2020 fuel crisis, and ensuring retailers are protected from licensing issues and price hikes. The final decision on subsidy eligibility will be made by the relevant cabinet committee.
The move follows a similar fuel subsidy initiative announced by the Khyber Pakhtunkhwa government for motorcyclists and rickshaw drivers, as reported by Petroleum Division Secretary Hamed Yaqoob Shaikh to a parliamentary panel earlier this month. Shaikh stated the federal government’s scheme aims to cushion the impact of rising oil prices.
The ongoing conflict in the Middle East, particularly disruptions in the Strait of Hormuz, has contributed to volatility in global oil markets. While the government initially increased petrol and diesel prices by Rs55 per litre on March 6, it has maintained those rates for two subsequent weekly revisions, while significantly increasing prices for kerosene and jet fuel – by approximately 128% and 150% respectively – since the start of the regional conflict. Pakistan has warned of strict action against hoarding of petroleum products in light of the regional crisis, according to reports.
Alongside the fuel quota system, the Ministries of Finance and Foreign Affairs are engaged in diplomatic efforts concerning Iran and Saudi Arabia to manage the broader situation. The government is also exploring whether adjusting petrol and diesel prices to reflect global market rates would encourage fuel conservation among consumers.