The federal government has verbally ordered the suspension of a Rs. 50 billion subsidy at utility stores, with written orders expected to follow soon, sources told Raised By Numbers.

This decision is set to impact 26 million deserving families who were benefiting from subsidies on essential items such as flour, ghee, rice, sugar, and pulses.

The most vulnerable, including those under the Benazir Income Support Program (BISP), have also been affected by the removal of subsidies.

Previously, subsidies were provided on key staples such as flour, ghee, sugar, pulses, and rice, offering relief to impoverished segments of society. However, this relief was abruptly withdrawn on Wednesday, placing the public in a precarious situation.

Sources told that utility stores are included in the privatization list, and a decision regarding their future is yet to be made. Previously, subsidies were provided to individuals with a monthly income of less than Rs. 40,000. The recent decision to halt subsidies was made during a recent federal cabinet meeting.

The impact is evident in the steep price increases at utility stores. The price of 1 kilogram of ghee has risen from Rs380 to Rs450, while a 10-kilogram bag of flour has jumped from Rs648 to Rs1,500. Sugar now costs Rs160 per kilogram, up from Rs109.

The price of rice has increased from Rs320 to Rs340 per kilogram, and pulses have also seen significant hikes. Daal Chana is now Rs260 per kilogram, up from Rs240, Daal Moong has increased from Rs310 to Rs330, and white channa has risen from Rs355 to Rs380.

Meanwhile, the Economic Coordination Committee (ECC) of the Cabinet has approved a higher rate of monthly subsidies to the USC per household, along with a turnover tax set at 1.25 percent on the USC. During a meeting chaired by Finance Minister Muhammad Aurangzeb, the ECC also approved a request from the Ministry of Industries & Production to designate the warehousing and logistics sector as an industry.

The meeting was informed that Rs. 60 billion had been allocated in the 2024-25 budget, including Rs. 50 billion under the Prime Minister’s relief package and Rs. 10 billion under the Ramazan relief package.