Govt, JI form panel to expand fuel relief and phase out levy

The federal government and Jamaat-e-Islami have agreed to establish a six-member committee to develop proposals for expanding targeted fuel assistance and gradually eliminating the petroleum levy. Planning Minister Ahsan Iqbal announced the agreement on Tuesday following talks between Prime Minister Shehbaz Sharif and JI leader Hafiz Naeemur Rehman in Islamabad.

The committee will include three representatives from each side. Iqbal said the government would be represented by Deputy Prime Minister Ishaq Dar, Adviser on Political Affairs Rana Sanaullah and himself, while JI is expected to nominate its three members separately.

Its mandate will cover two politically sensitive questions: how to extend the existing fuel-relief programme to more eligible consumers and how the petroleum levy might be phased out in the next federal budget. Government representatives said any adjustment would have to remain financially sustainable and operate within existing fiscal constraints.

Hafiz Naeem gave the government between seven and 10 days to produce a concrete relief plan. He maintained that JI wanted the levy abolished immediately, while the government favoured a gradual reduction, and warned that his party would resume its march towards Islamabad in mid-November if meaningful action did not follow.

The JI leader said negotiations would continue alongside preparations for the protest. He argued that the levy placed a disproportionate burden on middle- and lower-income households and insisted that reductions in headline fuel prices were not an adequate substitute for removing the charge itself.

Government officials acknowledged the pressure created by expensive fuel but linked recent price increases to international market conditions and regional instability. Iqbal said the administration wanted to protect vulnerable households without adopting short-term measures that could create larger fiscal or economic problems later.

Officials gave slightly different figures for participation in the existing relief scheme, placing current beneficiaries at approximately 12.5 million to 12.7 million. Sanaullah said the government expected coverage to rise to around 20 million people as implementation expanded and more eligible citizens entered the programme.

The relief mechanism was approved in September with Rs75 billion allocated for targeted support. Under its framework, eligible owners of motorcycles and three-wheelers receive a weekly fuel benefit of Rs500, while qualifying non-commercial cars with engines of up to 800cc receive Rs1,000 for every 10-day period.

JI’s campaign against the levy has included demonstrations, sit-ins and a long march that began in September before being paused for negotiations. The latest committee gives both sides another structured route towards a settlement, but the difference between immediate abolition and a phased approach remains unresolved.

The coming 10 days will determine whether the committee can agree on financing, eligibility and a timetable for levy reductions. Failure to produce an acceptable package could return the dispute to the streets in mid-November, increasing political pressure on the government as households continue to face elevated transport and living costs.