ECC Approves Rs75bn Fuel Relief Scheme, Refinery Upgrade Agreement

The Economic Coordination Committee (ECC) of the Cabinet has approved Rs75 billion for the Prime Minister’s Fuel Relief Scheme and endorsed a draft upgrade agreement aimed at modernising Pakistan’s existing refineries.

 

The decisions were taken during a meeting chaired by Finance Minister Muhammad Aurangzeb. The fuel relief programme is designed to provide targeted assistance to lower-income consumers following the recent increase in petroleum prices.

 

Under the scheme, owners of two- and three-wheelers will receive Rs500 per week, equivalent to five litres at a subsidised rate of Rs100 per litre. Cars with engines up to 800cc will qualify for Rs1,000 in relief over 10 days, based on monthly consumption of 30 litres at Rs100 per litre.

 

The facility will be available only to non-commercial users and will be restricted to one vehicle per eligible owner.

 

The Ministry of IT and Telecom will operate the digital Fuel Pass System (FPS) to manage the scheme and ensure that subsidies are delivered to eligible beneficiaries through a transparent mechanism. The ECC approved Rs75 billion as a Technical Supplementary Grant for implementation.

 

The committee also approved a draft Upgrade Agreement under the Pakistan Oil Refining Policy for Upgradation of Existing/Brownfield Refineries, 2023, as amended in August 2026.

 

The agreement will establish the framework for implementing and monitoring refinery modernisation projects, along with associated incentives. The projects will have a five-year completion timeline.

 

Separately, the ECC approved a proposal to address outstanding financial claims of oil marketing companies. Unadjusted input sales tax claims accumulated between July 2025 and June 2026 will be settled through the Inland Freight Equalisation Margin (IFEM), subject to due diligence and verification.

 

The committee also approved the export of 200,000 tonnes of surplus sugar under recommendations of the Steering Committee on Sugar. Safeguards will be applied to prevent excessive increases in domestic sugar prices.

 

The ECC approved an implementation framework for restructuring the ownership and management control of Pakistan National Shipping Corporation (PNSC).

 

A proposal concerning regulatory requirements for commercial imports of used vehicles was deferred pending recommendations from a committee reviewing the Engineering Development Board’s vehicle import inspection regime.

 

The ECC further approved Rs3 billion through a Technical Supplementary Grant for purchasing 15 bullet-proof sedans for security arrangements during the Shanghai Cooperation Organisation Council Summit, scheduled to be hosted by Pakistan in Islamabad in September 2027.

 

The government said the vehicles are required for secure transportation of visiting heads of state and stressed the need for timely preparations ahead of the summit.