Pakistan Govt to Give Fuel Subsidy to Bikers and Rickshaw Drivers After Price Hike
In a major relief initiative, the federal government has announced plans to provide a Fuel Subsidy scheme for motorcyclists and rickshaw drivers to cushion the impact of a massive hike in oil prices, following a similar move by the Khyber Pakhtunkhwa government . The announcement was made by newly appointed Petroleum Secretary Hamed Yaqoob Sheikh while testifying before the Senate Standing Committee on Petroleum on Monday, March 16, 2026 .
Fuel Subsidy : Why the Subsidy is Needed
The decision comes after petrol prices were raised by a historic Rs55 per litre earlier this month due to the escalating Middle East conflict and the subsequent closure of the strategic Strait of Hormuz . Petroleum Secretary Sheikh informed the Senate panel that around 70 per cent of Pakistan’s petrol imports come from the Middle East, and global fuel prices have risen sharply, with high-speed diesel increasing from $88 to $187 per barrel and petrol from $74 to $130 per barrel due to supply disruptions .
Officials from the Oil and Gas Regulatory Authority (OGRA) informed the committee that diesel prices witnessed about a 100 percent increase, while petrol prices rose by nearly 70 percent . The government has also increased the price of kerosene oil by Rs40 per litre, making it the most expensive consumer product at Rs358 per litre .
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Who Will Be Eligible
The Pakistan govt to give fuel subsidy to bikers and rickshaw drivers using a targeted approach based on existing social welfare databases. According to officials, the savings from the government’s austerity policy will be directed to deserving beneficiaries identified through the Benazir Income Support Program (BISP) database .
Petroleum Secretary Sheikh explained that the subsidy program has already begun development, with input from OGRA and the Petroleum Division . The assistance will be delivered using BISP beneficiary data, ensuring that financial support reaches eligible citizens and avoids misuse while focusing on vulnerable groups most affected by the price surge .
Officials informed lawmakers that nearly 30 million motorcycle and rickshaw users across Pakistan could potentially benefit from the proposed relief measure .
Funding from Prime Minister’s Austerity Fund
The Pakistan govt to give fuel subsidy to bikers and rickshaw drivers using funds generated through the government’s comprehensive austerity drive. The government has created a “Prime Minister’s Austerity Fund” with the Economic Coordination Committee (ECC) approving the allocation of Rs27.1 billion to this fund .
From this fund, the government will provide a subsidy of Rs23 billion to oil marketing companies (OMCs) to maintain fuel prices and fund relief initiatives . The government will pay a price differential of Rs75.05 per litre on high-speed diesel and Rs49.63 per litre on petrol to OMCs to keep prices stable .
Current Fuel Stock Position
During the Senate committee briefing, the Petroleum Division provided updated data on Pakistan’s fuel reserves:
Product Days of Supply
- Petrol 27 days
- Diesel 21 days
- LPG 9 days
- Crude Oil 11 days
- Jet Fuel (JP-1) 14 days
- LNG 9 days
Officials added that two of Pakistan’s ships are currently stuck in the Strait of Hormuz due to the ongoing conflict .
LNG Supply Crisis
Compounding the energy challenges, officials revealed that LNG supply from Qatar has been completely stopped since March 2, 2026 . Eight cargoes were scheduled to arrive in March, of which only two arrived, while six cargoes were expected in April, but their arrival is now uncertain .
Officials warned that LNG would not be available in the country after April 14, and the power sector’s gas requirements would not be met in April . While gas could be purchased from Azerbaijan’s SOCAR on the spot market, it would cost $24 per unit compared to Qatar’s $9 per unit, making electricity significantly more expensive .
Price Monitoring and Anti-Hoarding Measures
A petrol monitoring committee led by Finance Minister Muhammad Aurangzeb noted that the country’s fuel availability for March was fully secured, with coverage available up to mid-April based on current cargo planning and supply arrangements . Efforts were underway to extend coverage further towards the end of April .
The minister noted that the current stock position and supply outlook remain stable and that, based on the reports presented, there was no basis for panic buying or unnecessary stockpiling of fuel . The meeting directed relevant authorities, in coordination with OGRA and provincial governments, to closely monitor stock levels and market activity to deter hoarding .
Parliamentary Scrutiny
During the Senate committee meeting, Senator Manzoor Ahmed alleged that the “entire benefit was passed on” to oil marketing companies, while following the international price increase, consumers were charged high prices on stocks that had already been purchased . In response, the petroleum secretary said that the price was hiked to stop hoarding, adding that this “did not benefit oil marketing companies” .
Committee members inquired about the source of the Rs23 billion and the steps taken to achieve the savings, emphasizing that the benefit should reach the people rather than companies . Officials responded that, under the Prime Minister’s directives, various measures were implemented to ensure these savings .
Kerosene Price Hike Affects Poor
While petrol and diesel prices have been frozen with the help of subsidies, kerosene oil—often described as the “poor man’s fuel”—has become the most expensive consumer fuel product, now retailing at Rs358 per litre . This marks a 12.6 percent increase as of March 14 and brings the cumulative increase to 90 percent since the start of the month, when it was priced at Rs188.87 per litre .
Alternative Supply Routes
With the Strait of Hormuz blocked, procurement strategies are already moving towards greater diversification, with efforts underway to broaden sourcing from the international market and reduce reliance on any single corridor . Pakistan is exploring alternative import options, including shipments through the Red Sea, while discussions are also underway regarding potential crude imports from Russia .
However, Minister of State for Petroleum Ali Pervaiz Malik stated that importing Russian crude may not be a practical option for Pakistan due to financial and technical challenges, as Russian Urals crude is relatively heavy while most refineries in Pakistan are older hydroskimming facilities .
Analysis by Best Pak Mag:
The decision by the Pakistan govt to give fuel subsidy to bikers and rickshaw drivers represents a significant and timely intervention to protect vulnerable segments of society from the devastating impact of global fuel price shocks. With nearly 30 million potential beneficiaries, this initiative acknowledges that two-wheeler and three-wheeler users form the backbone of Pakistan’s informal transport economy and daily commuting population . The targeting mechanism using the BISP database is particularly commendable, as it ensures that relief reaches those most in need while minimizing leakage and corruption . The creation of the Prime Minister’s Austerity Fund and the allocation of Rs23 billion demonstrates the government’s commitment to translating administrative savings into tangible public relief . However, the broader energy context remains deeply concerning. The complete cessation of LNG supplies from Qatar since March 2, with only two of eight March cargoes delivered, threatens industrial production and power generation in the coming weeks . The warning that LNG will not be available after April 14, combined with the 90 percent cumulative increase in kerosene prices, suggests that the poorest households face continued hardship despite this targeted subsidy . For now, bikers and rickshaw drivers can anticipate meaningful relief, but the underlying vulnerability of Pakistan’s energy supply chain demands urgent and sustained attention.
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