The fuel subsidy in Pakistan has paid out Rs28.6bn, 38% of its budget. Petrol pumps that turn away token holders now risk their licences.

The fuel subsidy in Pakistan has grown into one of the government’s largest cash transfer programmes in a matter of weeks. By 4 November, Rs28.6bn had been paid under the Prime Minister’s Fuel Relief Scheme to motorcyclists, rickshaw drivers and owners of small cars, and 15.5 million people had registered. On Thursday, Prime Minister Shehbaz Sharif ordered the authorities to cancel the licences of petrol pumps that fail to serve registered beneficiaries. For fuel retailers, the scheme has moved from an optional extra to a condition of staying in business.

The short version

• Rs28.6bn has been paid under the fuel subsidy, 38% of the Rs75bn the ECC set aside on 14 September.
• 15,519,282 people have registered: 15.06 million motorcycles and about 449,000 cars of up to 800cc.
• Of 63.2 million tokens issued, 59.4 million (about 94%) have been redeemed.
• Pumps that refuse eligible token holders now face licence cancellation, on the PM’s orders.

What happened

At a review meeting at the Prime Minister’s Office in Islamabad on 5 November, officials reported that 15,519,282 citizens had registered for the scheme, that 63,153,685 tokens had been issued and that 59,445,347 had been used, according to Business Recorder and Dawn. Payments of Rs28.6bn had been made as of 4 November. Arab News put this at $103.4m.

The subsidy is Rs100 a litre. Dawn reports monthly quotas of 20 litres for two- and three-wheelers and 30 litres for cars of up to 800cc, while Express Tribune and Arab News describe the same support as weekly or ten-day tokens. Citizens register on a digital Fuel Pass system run by the IT ministry and redeem tokens at the pump. Separate call centres handle complaints from consumers and from pump operators.

The prime minister said the simpler registration process had increased sign-ups and called the scheme a “game changer” for future welfare programmes. He also directed authorities to cancel the licences of pumps that fail to facilitate eligible beneficiaries. The reports do not name the body that would cancel the licences.

Less than two-fifths of the fuel subsidy budget has been spent

PM’s Fuel Relief Scheme, Rs billion, payments as of 4 Nov 2026

Allocated by the ECC (14 Sep)

Rs75bn

Still unspent

Rs46.4bn

Paid to beneficiaries

Rs28.6bn

Why it matters

The fuel subsidy in Pakistan now covers roughly 15 million vehicles. That makes petrol pumps the delivery point for a large state payment, not just fuel sellers. In late October, a government meeting heard that about 31,000 people had missed out on the petrol subsidy, and stations with few redemptions were marked for audit. The licence threat goes further. It puts the cost of a technical fault, an expired token or a slow repayment on the retailer.

The budget matters too. Petroleum Minister Ali Pervaiz Malik said in September the programme would cost Rs25bn to Rs30bn a month. At that rate, the remaining Rs46.4bn would last about one and a half to two months (Knock-On calculation). Pump prices have been cut three times in a row, and petrol is now around Rs362 a litre. If oil stays lower, the case for keeping the subsidy will be tested.

The knock-on effects

First order: pumps must serve every token

Station owners now carry regulatory risk if the system fails at their forecourt. Expect more staff time at facilitation desks and closer attention to token reconciliation.

Second order: oil marketing companies feel the pressure

Dealers depend on their oil marketing companies for supply and branding. A cancelled licence means lost sales for the supplier too, so OMCs have a reason to push their networks to comply and to press for quick repayment of the subsidy.

Third order: a template for targeted relief

The government is already discussing targeted electricity support. A digital token system with 94% redemption gives it a working model, and it could be used beyond fuel.

Who could benefit

• Motorcyclists and rickshaw drivers: more pressure on pumps should reduce refusals.
• Delivery and ride-hailing riders: Rs100 a litre off a fixed quota lowers a daily cost.
• Compliant fuel retailers: stations that redeem smoothly may win customers from those that do not.

Who may face pressure

• Small and rural pumps with weak connectivity or few staff.
• Dealers waiting for subsidy repayments while they fund the discount upfront.
• The federal budget, if the scheme runs past its Rs75bn allocation.

What to watch

• Which body enforces licence cancellations, and whether any are cancelled.
• Whether the ECC tops up the Rs75bn allocation or narrows the scheme.
• The next pump price changes, which now follow oil near $100 a barrel.
• Dealer associations’ response. They are already pressing for an audit of refinery profits.

Sources

• Business Recorder, PM orders cancellation of licences of petrol pumps denying fuel subsidy, 5 Nov 2026
• Dawn, PM directs cancellation of petrol pump licences over failure to facilitate fuel subsidy beneficiaries, 5 Nov 2026
• Express Tribune, PM Shehbaz orders cancellation of petrol pump licences over denial of fuel subsidies, 5 Nov 2026
• Arab News, Pakistan says $103.4 million disbursed, over 15.5 million register under fuel subsidy scheme, 5 Nov 2026

This is analysis, not investment advice. Figures are as of 5 November 2026.