What happened
The government decided on Monday, 22 June 2026, to discontinue fuel subsidies for motorcyclists, small farmers, public transport and goods transport, citing a sharp decline in global fuel prices and the fact that the benefit had already been passed on to consumers.
The decision was taken at the seventh meeting of the National Steering Committee on Fuel Subsidy, chaired by Deputy Prime Minister and Foreign Minister Ishaq Dar. The committee reviewed the rollout of the subsidies across all provinces, Gilgit-Baltistan and Azad Jammu and Kashmir and agreed to discontinue the programme with the approval of Prime Minister Shehbaz Sharif.
The move followed recent reductions in petroleum prices, under which petrol was cut by Rs74 per litre and diesel by Rs67 per litre, bringing them to Rs299 and Rs311 per litre respectively, after the international market eased following a US-Iran agreement to end a conflict that had lasted more than three months.
The committee noted that the decline in global prices had allowed the relief to reach consumers directly through lower domestic fuel rates. Dar appreciated the interprovincial coordination during the rollout and directed that lessons learned from the exercise be documented and gaps in data and delivery be addressed to strengthen future welfare programmes. The meeting was attended by Special Assistant to the Prime Minister Tariq Bajwa, the federal secretaries for petroleum and information technology, the State Bank of Pakistan governor and senior representatives of the provinces, Gilgit-Baltistan and Azad Jammu and Kashmir.
Why it matters
The subsidy package was introduced to cushion consumers after the US-Iran conflict drove oil prices sharply higher. Petrol had reached Rs458 per litre in April, before the prime minister announced an immediate Rs80 per litre cut in the petroleum levy and unveiled support that included Rs100 per litre for motorcyclists, monthly payments of Rs70,000 for small trucks, Rs80,000 for large trucks and Rs100,000 for public transport buses, and Rs1,500 per acre for small farmers.
Ending the subsidies as prices fall reduces the fiscal cost to the government but removes a temporary cushion, leaving consumers exposed to future swings in global oil prices.
KhabarWire reported that the government had recently withdrawn its broader fuel-conservation and austerity measures.
What is still uncertain
The official statement did not set out how much the subsidies had cost in total or how many people had received them before the programme ended. It also did not say whether any arrears or pending payments to beneficiaries would still be settled. The trajectory of global oil prices, and therefore of domestic fuel rates, remains uncertain.
Sources & reporting notes
This is a summary of published reporting, not independent reporting. Details are as carried by the cited sources, which were reviewed on 2026-06-22.
- Islamabad Insider — "Govt decides to end fuel subsidies after sharp decline in global oil prices"22 June 2026 · The seventh steering committee meeting, the decision and its approval by the prime minister, and the history of the subsidy package.
- Business Recorder — "Govt to discontinue fuel subsidy with PM's approval, says DPM Dar"22 June 2026 · Confirmation that the programme was ended with the prime minister's approval and Dar's direction to document lessons learned.
