ISLAMABAD:
The government is working on a comprehensive package of quota-based fuel supply systems aimed at ending subsidies across the board.
A meeting of the Oil and Gas Regulatory System was held to finalize a plan to allocate gasoline distribution through a quota system to customers in order to maintain energy supplies.
The meeting was attended by officials from the IT Ministry, Finance and Petroleum Departments to finalize a plan.
The Ministry of IT, Finance, Oil etc. held a joint meeting to finalize a quota-based fuel supply system.
During the meeting, it was informed that the Treasury and Foreign Ministries are engaged in parallel efforts regarding Iran and Saudi Arabia to address the situation. The system is fast tracked to ensure consistency across all pumps and prevent operational deviations.
The government has claimed that it had given Rs69 billion subsidy to petrol and diesel consumers in the last two weeks and is now planning direct subsidy for two-wheelers and three-wheelers.
The four-wheeler owners may not be eligible for the subsidy.
The meeting finalized a mobile application-based fuel quota system for two- and three-wheelers, possibly including up to 800cc vehicles, to ensure targeted subsidy to the low-income strata and to minimize oil consumption through price signals.
The app will help implement the system of direct subsidy through allocation of petrol quota. The system will be app-based and fully automatic. A free, pre-installed app for retail operators will be provided, while consumers will use a separate open app.
Hardware distribution
The government imposes a minimum of two mobile phones per retail store to run the system. The IT Ministry is coordinating with manufacturers to supply specialized phones.
Start-up costs are estimated at Rs36,000 per unit, with retail prices around Rs72,000. Businesses are required to deposit funds into a designated government account to ensure immediate delivery of units.
The account number will be provided by Ogra.
Quota mechanism and vouchers
Vehicle-based quotas (eg 20 liters for motorcycles) will be linked to the user’s app via registration number and CNIC. Users generate a digital coupon through the app.
Retailers will scan/enter the coupon into their app; the system will automatically validate the available quota (eg if a user requests 20L but has a 15L quota, only 15L will be dispensed).
This mechanism is similar to the previous successful Ramadan package model.
Public subsidies and prices
The government provides subsidies for 2-wheelers and 3-wheelers.
Retailers will dedicate specific dispensers or nozzles for 2-wheelers and 3-wheelers to facilitate subsidized fuel distribution. Clarification is awaited as to whether subsidies will continue for 4-wheelers or whether they will end.
The government has ensured timely pricing to protect retailers from licensing issues and price hikes with the aim of avoiding the crisis in 2020. 5. Focal Person Submission by OMCs.
While OGRA already has outlet details, Oil Marketing Companies (OMCs) are required to submit focal person details for each detail page including, Focal person name, CNIC, Contact mobile number.
Implementation and supervision
Dealers must immediately share contact information and contact numbers for coordination. The IT Ministry will provide demos and video instructions on operating the system.
In an emergency, a waiver system is available for approvals through a designated process. The government is facing critical issues regarding fuel supply chains.
