Pakistan govt cuts fuel price for low-income segment people, rich to pay Rs 100 more

Pakistan Prime Minister Shehbaz Sharif on Monday announced the ‘petroleum relief package’ for the low-income segment. The development came days after the Pakistan government increased petrol prices.

Notably, under the 'petroleum relief package', people falling in the low-income segment would be given a subsidy of Rs 50 per litre on petroleum products. "The government will finance the subsidy by charging Rs 100 more from the affluent," said Minister of State for Petroleum Musadik Masood Malik as quoted by Dawn. 

In a move aimed at easing the burden of high fuel prices on the poor, Pakistan Minister of State for Petroleum Musadik Malik, while addressing a press conference in Islamabad, said: "We will make petrol cheaper for the poor and will make it expensive for the rich. Those who can afford expensive cars will pay more for petrol and that money will be used to reduce fuel costs for poor people."

Malik stated that the government will make petrol expensive for the rich and cheaper for the poor. “The higher prices paid by the rich will be used to provide petroleum subsidies to low-income people," the minister said. 

The petroleum products at subsidised prices will be given to low-income consumers who have motorcycles, rickshaws, 800cc cars, or other small cars, Dawn reported. 

Saudi Arabia refuses 'easy money' to Pakistan

Saudi Arabia is no longer willing to bail out Islamabad and refused to provide easy money to Pakistan. According to reports, Saudi Arabia is demanding economic reforms. Looking at the current economic condition of Pakistan, the cash-strapped country is in dire need of sustained US dollar inflows to avoid defaulting on nearly USD 80 billion of international loan repayments over the next three and a half years. The country is currently sitting on just USD 3 billion in foreign exchange reserves.

According to reports, Saudi Arabia’s decision to refuse to provide any further bailouts or interest-free loans to Pakistan has left the government in Islamabad in shock and has prompted the finance minister to complain that even friendly countries aren’t keen on helping Pakistan out of its economic emergency. 

Speaking to reporters of Middle East Eye, Umar Karim, an associate fellow at the King Faisal Center for Research and Islamic Studies, said Pakistani authorities are in a state of shock. “While previously Saudi Arabia and other Gulf countries would bail Pakistan out off the back of a phone call from the foreign minister or the prime minister, this time around they are really being put through the mill,” Karim added. 

The Pakistani government suspended almost all imports over six months ago in an attempt to restrict the outflow of foreign currency, causing a shortage of raw materials across all manufacturing sectors and the temporary shutdown of several automobile manufacturing and textile factories.