LAHORE: For Lahore’s motorcyclists, the Rs100-a-litre petrol relief arrived less than three weeks ago. In talks with the International Monetary Fund (IMF), it is already being treated as temporary.
According to sources familiar with the talks, the government and the IMF remain divided over fuel subsidies. The Fund insists that blanket fuel subsidies end and that only targeted support remain. The government has decided not to scrap the relief for motorcycles and small cars immediately. But the sources say an extension beyond three months is unlikely, which means the scheme could end around mid-December.
The IMF has opposed both direct fuel subsidies and cross-subsidies, in which one group of consumers pays more to keep prices lower for another. The sources said the Fund estimates the true cost of three months of relief could exceed Rs75 billion.
Petrol rose Rs3.26 on Friday to Rs390.66 a litre. That’s about Rs53 more than in late August, when petrol stood at Rs337.78.
Under the scheme, a motorcyclist or rickshaw driver gets Rs100 a litre off on up to 20 litres a month, worth up to Rs2,000. An 800cc car owner gets the discount on 30 litres, worth up to Rs3,000. For a rider who uses 20 litres a month, the bill falls from about Rs7,813 to Rs5,813 at today’s price.
Pakistan’s own briefing to the IMF shows how that pump price is built. The sources say imported petrol costs roughly Rs250 a litre, while consumers pay around Rs390. About Rs110 of the difference is taxes, and about Rs27 is various margins. That means the Rs100 relief returns less to the rider than the state collects in tax on the same subsidised litre.
When the scheme ends, nothing at the pump will change: the price will be the same. But a Lahore rider’s monthly fuel bill will rise by up to Rs2,000 overnight.
Who in Lahore depends on it
The scheme is aimed at the vehicles that keep Lahore moving, including motorcycles carrying office workers and delivery riders, and rickshaws and chingchis carrying passengers on routes the Metro and Orange Line don’t reach.
The rollout was not smooth. Petrol dealers initially refused to supply fuel under the scheme, before motorcyclists began receiving relief after talks with the government. The scheme was later extended to vehicles registered since January 2006.
Lahoris were already doubtful about fuel relief before this. When petrol was cut by 58 paisa in August, consumers called it a joke as inflation climbed.
At a petrol pump on Jail Road, Shahid Ali, 42, sat on his motorcycle and listed what fuel now costs his family.
“I put roughly Rs525 into petrol every day just to survive. How do you expect me to feed my three children, my parents and my siblings on this?” he told The Lahore Times.
At Friday’s price, Rs525 buys about 1.3 litres, or roughly 40 litres a month. That comes to a monthly fuel bill of about Rs15,750, and Ali pays all of it at full price. He has not registered for the relief scheme.
“No relief has ever reached the people in this country. All we get are empty promises and false hopes, while petrol prices keep rising every day,” he said.
The relief is being paid. The Lahore Times has confirmed that registered owners who verify their vehicles with the government receive the discount at the pump. Ali’s case shows the scheme’s weak point, such as it depends on users signing up first, by SMS and then a token, and the riders who need it most are not always the ones who do.
Even if he registered, the scheme would cover only half of what he uses. His 40 litres a month are double the 20-litre quota, so the maximum Rs2,000 relief would still leave about Rs13,750 at full price.
“There is no mercy or fear in these rulers. They push us every day, thinking we can do nothing against them,” he said. “We have no choice but to protest on the streets. The solution lies only in taking our rights back, not in empty talk.”
Beyond the pump: businesses and kitchens
The relief covers petrol for small vehicles only, and what drives business costs is diesel. Diesel fell slightly on Friday to Rs399.34, but it crossed Rs400 last month, pushing up transport fares and food prices across the city. Goods transporters, loaders and wholesale traders receive no fuel relief at all, and they pass their costs on to shoppers.
That shows up in Lahore’s kitchens. With inflation back above 11%, prices for many Lahore workers are rising faster than their wages, and the petrol pump is one of the first places households feel it.
The gas bill behind the petrol fight
Fuel prices were not the only point of disagreement. The sources say the talks are also stuck over Rs1.4 trillion in receivables owed to gas companies. The IMF wants these written off, and the government does not agree. The gas sector’s circular debt has now reached Rs3.6 trillion.
Islamabad has proposed clearing the debt through tariff-differential claims by the Sui gas companies and through the extra profits of OGDCL, PPL and GHPL, totalling Rs850 billion. The IMF has raised concerns, saying that using those profits would not be fiscally neutral. A detailed meeting on the plan is expected next week.
This matters directly for Punjab. SNGPL supplies most Lahore homes, and households are already squeezed between missing Sui gas and unaffordable LPG cylinders. How the circular debt is settled will shape what they pay this winter.
There was one note of agreement. The IMF praised the government’s reforms in the gas sector and its progress in reducing gas theft.
The question for Lahore
The government argues that targeted relief is fairer than cutting the levy. Jamaat-e-Islami chief Hafiz Naeem-ur-Rehman has argued the opposite, saying ending the petroleum levy is the only real relief.
The IMF’s position leaves a narrower question that what happens in December? If the relief ends while petrol stays near Rs390, Lahore’s working commuters will absorb the full price for the first time since the summer’s price surge. The talks have not yet produced an answer.
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