ISLAMABAD: The government has finalised a mobile application-based quota system for fuel for two- and three-wheelers, which may possibly include up to 800cc vehicles, to ensure a targeted subsidy to the low-income strata and to minimise oil consumption through pricing signals.
The details of the quota-based fuel supply system have been tested and finalised by the Oil and Gas Regulatory Authority (Ogra) and the ministries of finance, petroleum and information technology, a senior government official told media.
Based on these workings, the government will now take a final decision on whether the scheme should extend to small cars or remain restricted to two- and three-wheelers.
The government plan involves “a quota-based fuel supply system” to be operated through a mobile application and would be end-to-end automated.
“A free, pre-installed app for retail operators will be provided,” said a senior official, adding that consumers will use a separate application. Meanwhile, the government will mandate a minimum of two mobile phones per retail outlet to run the system.
The Ministry of Information Technology (IT) has been coordinating with cellular phone manufacturers to provide specialised phones at an initial estimated cost of Rs36,000 per unit, with retail pricing around Rs72,000. Petrol stations have been required to deposit funds into a designated government account to ensure the immediate delivery of devices. The account number will be communicated to them by Ogra.
Talking about the quota mechanism and vouchers, an official said vehicle-based quotas will be linked to the user’s app via a registration number and their Computerised National Identity Card (CNIC). However, quota limits will be finally decided by the cabinet committee concerned.
The users will generate a digital voucher through the app, while the retailers will scan or enter the voucher, leading the system to auto-validate the available quota. For example, if a user requests 20 litres but has a 15-litre quota, only 15 litres will be dispensed. The official said the mechanism was similar to the previously successful Ramazan Package model.
On the financial pricing side, the government will be providing subsidies for two- and three-wheelers. Retailers and petrol stations will be required to dedicate specific dispensers or nozzles for these vehicles to facilitate subsidised fuel distribution.
The critical decision is still pending on whether subsidies will also be extended to four-wheelers or if they will be eliminated. The official said that the government was trying to ensure timely pricing to protect retailers from licensing issues and price hikes to avoid the crisis of 2020.
All oil marketing companies (OMCs) will also be required to appoint focal persons for each retail site for seamless operations of the scheme and provide their contact details to Ogra for round-the-clock monitoring of the scheme to redress consumer complaints. The details of focal persons — including their name, mobile phone numbers and CNIC — will also be available to Ogra.
For implementation and oversight, the details of retailers’ focal persons and contact numbers will also be provided to OMCs and the petroleum division. The IT ministry will provide demos and video tutorials on how to operate the system. In case of emergencies, a dispensation system will be made available for approvals through a designated process.
Officials said the government was facing critical conditions regarding fuel supply chains. They said demand did not decline despite challenging conditions and heavy foreign exchange requirements, while the additional fiscal burden was currently being met through cuts in the development programme and special emergency allocations in the budget. So far, for two weeks of unchanged petrol and diesel rates, the cost has been estimated at Rs70 billion.
The ongoing Middle East war and the resulting shipping paralysis in the Strait of Hormuz have sent the global oil prices haywire.
Influential quarters within the government advocate that changing petrol and diesel rates to reflect the global environment could send a compelling signal to consumers to conserve fuel and forego unnecessary travel. After initially increasing petrol and diesel prices by Rs55 per litre on March 6, the government has kept rates unchanged for two subsequent weekly revisions, while continuously increasing kerosene and jet fuels by about 128pc and 150pc since the start of the Middle East conflict.
The ministries of finance and foreign affairs are separately engaged in parallel efforts regarding Iran and Saudi Arabia to manage the situation. The quota-based fuel system is being fast-tracked to ensure consistency across all pumps and prevent operational discrepancies, the official said.
Petroleum Division Secretary Hamed Yaqoob Shaikh had told a parliamentary panel earlier this month that the government was working on a subsidised fuel scheme for motorcyclists and rickshaw drivers to cushion the impact of a massive hike in oil prices, following a similar move by the Khyber Pakhtunkhwa government.
“The government is working on a package to provide relief to (owners of) motorcycles and rickshaws,” Sheikh had said while testifying before the Senate Standing Committee on Petroleum.
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