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The federal government has formally requested provinces to share the additional cost of higher international petroleum prices, a move aimed at averting a steep rise in domestic fuel prices, according to multiple reports.

The demand was made in recent days through direct communication with provincial governments, mainly Punjab and Sindh, to contribute funds that would offset the difference between the imported cost and the sale price of petrol and diesel. Sources told Dawn that provincial governments are expected to respond after consultations on whether they have the fiscal space to comply.

The request follows the release of Rs27 billion to settle the oil industry's price differential claims, after the Prime Minister decided to hold petroleum prices steady despite the global surge.

Coverage comparison

All accounts indicate that the federal government has initiated collaboration with the provinces to manage fuel prices without resorting to an immediate increase. However, there are variations in how the story is framed.

Three of the four examined articles focus on the federal-provincial dynamic, highlighting the government's appeal to the provinces to share the burden. One report specifically mentions that President Asif Ali Zardari and Prime Minister Shehbaz Sharif, after detailed discussions, prevailed upon the four provinces to participate in the 'noble cause' of sharing the subsidy burden, which the Centre has so far shouldered alone.

Other reports detail the financial commitments, noting that the provinces are pooling around Rs200 billion for three months, structured according to their National Finance Commission (NFC) shares. This includes roughly Rs100 billion from Punjab, Rs51-52 billion from Sindh, Rs15 billion from Khyber Pakhtunkhwa, and Rs8-9 billion from Balochistan.

Key Claims

  • The federal government is asking the provinces to share the additional cost of higher international fuel prices to avoid a domestic price hike. (Reported by Dawn citing government sources)
  • The Prime Minister took the decision to 'hold' petroleum prices despite the global surge, releasing Rs27 billion to settle the oil industry's price differential claims. (Reported by Dawn)
  • The provinces are pooling around Rs200 billion for three months for fuel subsidies, with Punjab contributing around Rs100 billion and Sindh up to Rs52 billion. (Reported by Dawn)
  • A coordinated plan is emerging to provide subsidised petrol and diesel to motorcyclists, small farmers, and transporters. (Reported by Dawn citing policy documents)
  • There is an expectation that another major hike in petroleum prices could come within a week, with an estimated price gap of Rs100 per litre for petrol and over Rs200 per litre for diesel. (Single-source claim reported by Dawn)

Perspectives

Provincial governments have expressed willingness to cooperate but have sought clarity on the financial implications.Punjab and Sindh, in particular, have indicated they will revert after internal consultations, suggesting a cautious approach to confirming the terms of their participation.

Canadian-based international affairs analyst, Mohammad Khan, said the move reflects a pragmatic step to manage a national crisis without burdening the public with immediate price increases. He noted that the federal government's approach of involving provinces in subsidy administration aligns with constitutional and fiscal responsibility.

Political commentator Ayesha Qureshi viewed the development as a significant delegation of financial responsibility to the provinces. "This is a landmark moment for intergovernmental fiscal relations, but the success of the plan will depend on transparent targeting and efficient administration at the provincial level," she said.

The coordination between the centre and provinces, following a meeting of the National Assembly's standing committee on finance, was highlighted in several reports as a positive step towards a unified national response. The use of digital wallets for direct benefit transfers was specifically mentioned as a positive measure to ensure transparency and curb corruption.