As the Middle East conflict drives global oil prices sharply higher, Pakistan is weighing measures like fuel rationing and differential pricing between two- and four-wheelers. While the government says it aims to shield citizens from rising costs, questions are emerging about who actually benefits from these policies.
Since the outbreak of the US-Israel war with Iran on February 28, international oil prices have surged by nearly 50%. In response, Pakistan raised fuel prices by around 20% (Rs55 per litre), triggering higher transport fares and food costs nationwide. With uncertainty persisting, authorities are now considering targeted relief strategies.
One key proposal involves charging higher fuel prices for four-wheelers while protecting two-wheeler users—based on the assumption that car owners are wealthier and motorbike users represent the broader population.
Data from the latest Household Income and Expenditure Survey (HIES) supports part of this view. Fewer than 9% of households own a car, and nearly 72% of these fall within the richest income bracket. This suggests that excluding car owners from fuel subsidies could be a reasonable step.
However, the picture becomes more complicated with motorcycles. Around 58% of households own a two-wheeler, but ownership is still skewed toward middle- and higher-income groups. In fact, the poorest households are far less likely to own bikes, meaning they may not benefit from such targeted subsidies at all.
This raises a critical concern: while protecting two-wheeler users may appear pro-poor, it could largely benefit better-off segments, leaving the most vulnerable behind.
Experts argue that if the real goal is to protect low-income groups, policies should instead focus on improving and subsidising public transport or supporting those with no reliable access to mobility—rather than relying solely on vehicle-based fuel relief.