The federal government is enforcing stringent austerity measures, including a Rs100 billion reduction in the Public Sector Development Programme (PSDP), to fund public relief amid economic pressures stemming from tensions in the Middle East, Finance Minister Muhammad Aurangzeb told the National Assembly.
The minister stated that these measures were necessary after the administration provided a blanket subsidy of Rs. 129 billion to keep the prices of petroleum products stable for three consecutive weeks, according to an official report today.
He elaborated that the government is now shifting its strategy to a targeted subsidy mechanism designed to benefit deserving segments of society. This support will be directed towards motorcyclists, the trucking industry, public transport operators, and small farmers.
During a discussion on fuel prices, the Finance Minister acknowledged constructive proposals from both treasury and opposition members, concurring with the suggestion on the importance of developing strategic fuel reserves for the country.
In response to a Calling Attention Notice, Defence Minister Khawaja Asif underscored the necessity of transitioning towards more affordable energy sources, such as solar power, to decrease national energy costs. He noted, however, that Pakistan remains constrained by existing power purchase agreements with Independent Power Producers (IPPs).
Echoing the emphasis on alternative energy, Minister of State for Climate Change Shezra Mansab Ali Khan Kharal confirmed the government is actively encouraging clean energy. She clarified that forthcoming changes to the net metering policy would only apply to new prosumers, and all existing agreements would be honoured until their original terms expire.
Ms Kharal also revealed that Pakistan is no longer importing coal for electricity generation, emphasising a switch to utilising local coal resources for this purpose.
Separately, Minister of State for Finance Bilal Azhar Kayani informed the house that tax revenue collection has witnessed growth during the first eight months of the current fiscal year. He mentioned that the government is taking steps to broaden the tax net while also working to mitigate the public impact of the US-Iran war.
Mr Kayani added that, considering the current situation, the administration had reduced the petroleum levy, bringing the levy on diesel down to zero, and has successfully ensured the supply of petroleum products across the nation.
The House was then adjourned until 5 pm on Wednesday.