Givt absorbed the shock for two to three weeks and carries the burden internally while ensuring uninterrupted availability
ISLAMABAD:
The government on Monday defended its handling of the fuel price hike, telling the National Assembly that emergency measures, including subsidies of over Rs 100 billion, were rolled out to protect consumers after global oil markets were rocked by the Iran crisis and disruptions to key supply routes.
Delivering a policy statement on the floor of Parliament, Oil Minister Ali Pervaiz Malik said the situation took a dramatic turn after the February 28 attack on Iran, which disrupted global energy flows, particularly through the Strait of Hormuz, which carries 25 to 30 percent of the world’s oil supply.
He said crude oil prices, which had been hovering around $70 a barrel, rose to as high as $170, while diesel prices rose to $280 in global markets.
“No one had prepared for such conditions,” the minister said, adding that the government had to quickly draw up a response plan after the crisis unfolded.
He said the authorities opted against allowing shortages or chaos in fuel supply, noting that one option had been to freeze prices at the cost of long queues and public distress.
Instead, the government absorbed the shock for two to three weeks, carrying the burden internally while ensuring uninterrupted availability.
He said alternative supply routes were arranged following disruptions in Hormuz, with Prime Minister Shehbaz Sharif, the deputy prime minister and the army chief engaging Gulf countries to secure supplies.
Malik thanked Saudi Arabia, the United Arab Emirates and Oman for facilitating oil supplies through special arrangements, while also acknowledging Iran for allowing Pakistani ships to pass through the Strait of Hormuz despite tensions.
The minister said Pakistan, which depends on Hormuz for about 90 percent of its oil imports, faced cascading challenges as LNG supplies were also affected, rendering a long-term gas deal ineffective.
He said the government convened a broad national consultation involving the president, the prime minister, chief ministers of all four provinces, the prime minister of Azad Kashmir and the caretaker chief minister of Gilgit-Baltistan to formulate a unified response.
“We all ensured that people were not forced into queues,” he said, adding that targeted relief mechanisms were designed for all segments, from motorcyclists to farmers.
Malik, detailing relief measures, said subsidies were provided through a transparent, technology-driven system developed by the IT ministry, with funds already reaching millions.
A subsidy of Rs 100 per liter has been introduced for motorcyclists for three months, while inter-city transport has also been subsidised.
Bus owners get Rs 100,000 per month, and railway fares to the public have not been increased.
He added that government-run intercity transport services had been made free in some cases.
Farmers are receiving support through Kisan cards and other digital platforms, while uninterrupted gas supply has been ensured to 10 fertilizer plants to prevent a fertilizer crisis, keeping prices below Rs 4,500.
The minister said a ministerial committee is reviewing the availability of oil and fertilizers and prices on a daily basis, while domestic gas supplies have been managed to ensure availability during peak hours.
He acknowledged that while consumers faced price pressures, the government had prioritized uninterrupted supply over shortages.
However, the opposition sharply criticized the government’s approach.
Speaking during the debate, lawyer Gohar Ali Khan questioned the rationale behind the price hikes, saying the government had raised fuel prices more sharply than regional countries.
He claimed that while global prices rose by about three percent, Pakistan raised prices by up to 20 percent, later raising them further from 42 to 54 percent.
He also criticized the introduction of higher taxes and questioned why the government had not asked the oil companies to reduce profits, as done in India.
Gohar said the government had first increased the oil tax to Rs160 per liter before reducing it to Rs80 and urged that the debate continue in the next session.
He also pointed to financial hardship and cited a case of a woman who allegedly died of starvation despite allocations under Benazir’s income support programme.
He criticized the Prime Minister for not attending Parliament, unlike the previous PTI government.
Responding to the criticism, Minister Malik said the opposition’s concerns were not based on complete information, suggesting that the details had not been properly communicated at the provincial level.
He maintained that fuel prices had risen globally by as much as 80 percent in some cases and that Pakistan’s response had focused on mitigating the public while ensuring continuity of supply.
