ISLAMABAD – The federal government has decided to create more fiscal room for a petrol subsidy. This move comes after further reductions in the development budget, according to reports on Wednesday.
Sources confirmed that an additional Rs63 billion has been cut from the federal development budget. With this latest reduction, the total cut has reached Rs163 billion. The original development budget for the current fiscal year was Rs1,000 billion.
After these reductions, the revised development budget now stands at Rs837 billion. Last month, the government had already reduced the budget by Rs100 billion. These steps aim to support the petrol subsidy and ease financial pressure on consumers.
Officials said the cuts were necessary to fund fuel relief measures. The petrol subsidy is part of a broader plan to control rising costs. Authorities are trying to balance fiscal discipline with public relief.
The largest cuts have been made in funds allocated to provinces and special regions. These reductions have reached up to 20 percent in some areas. Budgets for water resources and the National Highway Authority have also been reduced. These sectors saw cuts of more than 17 percent.
Despite these reductions, the government continues to receive petrol and LPG shipments. This helps maintain fuel supply across the country. Stable supply is important for the success of the petrol subsidy.
The decision reflects the government’s effort to manage economic challenges. Rising inflation and global fuel prices have increased financial pressure. The petrol subsidy is expected to provide some relief to citizens.
Last week, Prime Minister Shehbaz Sharif announced a reduction in fuel prices. The price of petrol was reduced by Rs11.83 per litre. The new petrol rate now stands at Rs366.58 per litre.
At the same time, diesel prices were also lowered. Diesel saw a major cut of Rs134.81 per litre. The new diesel price is now Rs385.54 per litre.
These price cuts, along with the petrol subsidy, aim to support consumers. The government hopes these steps will reduce the cost of living. However, budget cuts may affect development projects in the coming months.
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Overall, the government is focusing on short-term relief through the petrol subsidy. At the same time, it continues to adjust spending to manage fiscal challenges.
