Govt approves Rs 24b to provide direct subsidy to oil consumers

Ibn-e-Ameer

The government has approved Rs 24 billion supplementary grant to give targeted subsidies to the oil consumers amid high oil prices.

The prices crossed Rs 200 per litre on Thursday following a fresh hike in the prices of petroleum products.

Ministry of Poverty Alleviation & Social Safety informed that the rising trend of petroleum prices had adversely impacted the common man particularly the low-income households in the country.

Though the Government was currently providing across the board un-targeted fuel subsidy, it was costly, unsustainable and inequitable as the benefit disproportionately goes to richer households consuming relatively more fuel products.

The fiscal constraints, as well as equity concerns, call for a major shift towards targeted relief for providing a cushion to the poor and the vulnerable in the society, particularly farmers, users of public transport, rickshaws, motorbikes, and others.

Benazir Income Support Program (BISP) provides a safety net through cash transfers to vulnerable and deserving households.

Oil prices maintained: Govt to spend Rs 33 billion

At present, BISP was providing an unconditional cash transfer of Rs. 14000/- per family on a half-yearly basis to 7 million eligible households, falling in the lowest two Quintiles and had a budget to reach out to 8.00 million households by the end of the Financial Year 2021-22.

Ministry of Poverty Alleviation & Social Safety further informed that in pursuance of the Prime Minister’s earlier directive, the Finance Minister, in a meeting held on May 27, 2022, endorsed the proposal for disbursement of additional relief to offset the impact of the hike in prices of petroleum products.

The relief would be provided to 14.00 million households, i.e 06 million more households in addition to the existing 08 million BISP beneficiaries by raising the existing Proxy Means Test (PMT) score to Quintile using the NSER database.

Ministry of Poverty Alleviation & Social Safety submitted the proposals for consideration and approval of the ECC of the Cabinet.

The Economic Coordination Committee (ECC) of the Cabinet considered the summary submitted by the Ministry of Poverty Alleviation & Social Safety regarding targeted Relief to Mitigate the Impact of the Hike in Petroleum Prices” and approved the proposals. ECC further approved a transfer of Rs.24 billion to BISP from the Ministry of Poverty Alleviation & Social Safety on TSG.