The federal and provincial governments are devising a plan to introduce a diesel subsidy aimed at alleviating the burden on farmers struggling with soaring fuel costs amid ongoing Middle East tensions. Discussions are in progress between the federation and provinces to finalize a subsidy package specifically targeting small-scale farmers.
Under the proposed scheme, farmers owning up to five acres of land could receive a subsidized support package for the upcoming Kharif season. The subsidy is expected to be up to Rs1,500 per acre initially. The funds will be directly transferred to farmers via digital wallet accounts, with financing drawn from provincial budgets.
In a related development, a similar subsidy mechanism is being considered for motorbike and rickshaw users, with provinces responsible for direct disbursement. The federal government is expected to formally announce these subsidies, while provinces will oversee their distribution through a defined framework.
This initiative is a response to the rising petroleum prices caused by regional instability. Collectively, provinces are anticipated to allocate around Rs150 billion to support this effort. Existing data on small farmers in Punjab and Sindh will facilitate efficient subsidy distribution. In Khyber Pakhtunkhwa alone, approximately 1.5 million farmers are projected to benefit from the diesel subsidy.
Recently, a high-level meeting was convened at the Finance Division to discuss petroleum prices and targeted subsidy mechanisms. Chaired by Finance Minister Muhammad Aurangzeb, the meeting included participation from Chief Ministers of Punjab, Sindh, Balochistan, and Khyber Pakhtunkhwa, with several attending virtually. Federal ministers for Petroleum, Economic Affairs, and Information Technology and Telecommunication, along with senior officials from relevant ministries and regulatory bodies, were also present.
In his opening remarks, the Finance Minister emphasized that this meeting was part of ongoing consultations initiated under top political leadership to develop a coordinated and sustainable approach to petroleum pricing and subsidy reforms. He highlighted the necessity of collaborative decision-making and close coordination between the federal government and provinces to ensure effective implementation.
