Fuel relief is welcome but the levy must go

September 14, 2026

The government’s decision to provide Rs100 per litre relief on petrol to motorcycle, rickshaw, Qingqi and small-car users deserves appreciation. At a time when global oil prices have crossed $100 a barrel, millions of Pakistanis are facing higher transport and living costs. The relief can provide some support to families already struggling with inflation. Under the scheme, users of motorcycles, rickshaws and other two- and three-wheelers will receive relief on up to 20 litres of petrol a month. Owners of cars up to 800cc will receive relief on up to 30 litres. But an important question remains: why did the government take so long to announce this relief?

The rise in international oil prices and its impact on Pakistan were not unexpected. The government had enough time to prepare a targeted relief programme. Waiting until the pressure on ordinary citizens became severe raises questions about the timing of the decision.

There is also a bigger issue that the government needs to address. Instead of announcing a subsidy, it should consider reducing or withdrawing the Petroleum Development Levy (PDL).

A subsidy means the government collects money through taxes and levies and then returns some of it to selected consumers. This can be complicated and may require registration, verification and other administrative procedures.

Reducing the petroleum levy would be much simpler. It could provide immediate relief to consumers at petrol stations without requiring a separate scheme.

The government has limited financial space because of its commitments under the International Monetary Fund programme. Therefore, every rupee must be used carefully. A temporary reduction in the petroleum levy could be a more direct and transparent way to share the burden of higher global oil prices.

The Rs100 per litre relief is a welcome step and should help vulnerable consumers. But the government should also review the taxes and levies imposed on petroleum products. People need immediate relief, not complicated procedures.