The federal government is preparing to provide motorcycle owners with around Rs. 2,000 in monthly fuel relief as petrol prices surge, while keeping the petroleum levy unchanged.

Prime Minister Shehbaz Sharif has approved the proposed scheme for an initial three-month period. Its continuation will depend on available funds and developments in the international oil market.

The proposed payment would partially offset the impact of higher petrol prices for motorcycle users. However, Rs. 2,000 is equivalent to only about five litres of petrol at current prices.

Petrol is currently priced at around Rs. 376 per litre, while high-speed diesel (HSD) costs about Rs. 403 per litre.

The government is charging approximately Rs. 106 per litre in petroleum taxes on petrol and around Rs. 101 per litre on diesel, placing a significant tax burden on fuel consumers.

Instead of reducing the levy and lowering prices at the pump, the government is opting for targeted financial assistance for motorcycle owners.

The Finance Ministry has also resisted proposals to reduce the petroleum levy and use part of the Rs. 430 billion contingency allocation to cover the resulting revenue shortfall.

The previous fiscal year’s contingency allocation was Rs. 389 billion, of which Rs. 276 billion was spent, leaving Rs. 113 billion unutilized.

Meanwhile, petroleum levy collections reached Rs. 1.567 trillion during the previous fiscal year, showing the growing importance of fuel taxes to government revenues.

The government has linked the recent fuel price increases to rising international oil prices and the conflict in the Middle East. Higher global crude prices have pushed up domestic fuel costs, increasing pressure on household budgets.

The proposed relief is focused on motorcycle owners, who are among the most affected by higher petrol prices because of their dependence on two-wheelers for daily travel. However, expensive fuel also raises transportation and business costs across the economy.

The government’s current approach preserves petroleum tax revenue while offering limited relief to a specific group of consumers.

This means motorists will continue paying the higher fuel price at the pump, with the government providing a separate monthly payment to partially offset the burden.

The move comes amid growing demands for a reduction in the petroleum levy as fuel prices continue to rise.