Pakistan's government has enrolled 9.5 million people in a text-message-based fuel subsidy that gives motorcycle, rickshaw, and small-car owners 100 rupees ($0.36) off per litre of petrol. The scheme, launched in September 2026, was a direct response to petrol prices climbing nearly 50 percent since the Iran war began on February 28. Federal Minister Shaza Fatima Khawaja told Al Jazeera the system was redesigned iteratively — dropping ownership requirements, eliminating registration fees, and scrapping a five-litre minimum purchase after user complaints. The mechanics are simple: applicants text their national ID, vehicle registration, and province to 9771. A second message before each fill-up generates a token redeemable at any pump. Two- and three-wheelers receive 500 rupees ($1.80) per week, capped at four tokens monthly. Cars up to 800cc get 1,000 rupees ($3.60) every 10 days, capped at three tokens. Maximum monthly savings: 2,000 rupees ($7.20) for a bike, 3,000 rupees ($10.80) for a car. The numbers reveal a scheme that is popular but narrow. Over 8.1 million tokens went to two- and three-wheelers by late September, versus fewer than 380,000 for cars. The government approved 75 billion rupees ($271 million) for three months. Monthly costs have already risen from the initial 25-30 billion rupees to 35-40 billion rupees ($126-144 million), and Petroleum Minister Ali Pervaiz Malik says the government is prepared to run it for up to 10 months. The structural problem sits in plain sight. The petroleum development levy — 114 rupees ($0.41) per litre — remains on every litre sold in Pakistan, generating more than 100 billion rupees ($361 million) per month. The government is collecting roughly three times what it spends on the subsidy. Economist Safiya Aftab notes the levy was originally designed as an environmental tax but has become a core revenue instrument, one that drives the very inflation the subsidy is meant to offset. The scheme excludes diesel vehicles, cars above 800cc, and public transport entirely. A November 2024 Gallup Pakistan survey found 79 percent of respondents — rural and urban — rely on buses or wagons. Former finance ministry adviser Khaqan Najeeb puts it directly: a poor household using public transport, walking to work, or dependent on diesel-powered goods movement receives nothing while still absorbing higher food and transport costs passed through the supply chain. The IMF is watching closely. Pakistan is in a $7 billion IMF programme, and a Fund team is in Islamabad this week. Officials say the IMF wants relief capped at three months and redirected through the Benazir Income Support Programme, Pakistan's existing cash-transfer system. Khawaja says the Fund's condition from the start was that relief be targeted, not universal — which is why the token system was built instead of a blanket price cut. The scheme is well-engineered for what it is: a fast, mobile-first delivery mechanism that reaches low-income vehicle owners without requiring bank accounts. But it is embedded in a fiscal architecture where the government extracts far more through the levy than it returns through the subsidy. Economist Sajid Amin Javed argues that cutting the levy would deliver broader relief than a capped subsidy — but that would blow a hole in the fiscal deficit the IMF programme is designed to close. Pakistan is caught between two masters: its citizens' purchasing power and its creditors' balance sheets.
