The government and Jamaat-e-Islami (JI) have agreed on the broad outlines of a draft agreement to extend petroleum-related relief to consumers, after a tenth round of negotiations in Islamabad on Tuesday, the party has said.
JI Vice Emir Liaquat Baloch told reporters after the talks that the two sides had agreed on the basic outlines of the proposed agreement, and that a final decision was expected after a possible meeting between Prime Minister Shehbaz Sharif and JI chief Hafiz Naeemur Rehman. Another meeting between the negotiating teams is expected on Wednesday or Thursday.
The talks were held at the Ministry of Foreign Affairs, with Deputy Prime Minister and Foreign Minister Ishaq Dar leading the government team. The meeting is the latest in a series of negotiations that have run for more than two months, since JI began demanding the abolition of the petroleum levy as fuel prices rose sharply amid conflicts in the Middle East.
Baloch said the two sides had agreed on the need to provide relief to consumers, particularly low-income households, and to expand the existing relief measures. The government, he said, would consult the International Monetary Fund (IMF) on continuing the relief, and would share a framework for gradually reducing the levy after those consultations.
JI has proposed extending the relief scheme to owners of vehicles with engines of up to 1,000cc and to the agriculture sector, including tractors, and has put forward a mechanism for phasing out the levy altogether. The government told the JI delegation that it had started working on a plan to address its revenue requirements, and would present a future course of action on the levy's abolition while explaining its financial constraints.
The existing fuel relief scheme, rolled out across the country on 17 September, covers owners of motorcycles, rickshaws and vehicles of up to 800cc. The Fund has called for phasing out the fuel support scheme promptly, citing its high cost and broad targeting, which is one reason the government is treading carefully on any expansion.
The negotiations have been running in parallel with a series of fuel price cuts. On Tuesday, the government cut the petrol price by Rs8 to Rs338 a litre and diesel by Rs7, as a new system of daily pricing took effect. JI's demand, however, goes further than price adjustments: the party wants the petroleum levy itself abolished, arguing that it places an unfair burden on ordinary consumers.
JI first presented six proposals to the government on 3 November, including abolishing the levy, introducing a relief package, reducing public transport costs and extending relief to owners of vehicles above 800cc and the agricultural sector. Since then, both sides have described the talks as being in their final stage, with working papers prepared on the gradual elimination of the levy.
The stakes are high for both sides. JI has warned that it may resume its postponed long march to Islamabad by mid-November if no relief is announced, and Baloch said the party's future course of action would depend on the government's response. The government, for its part, is balancing the political pressure for relief against its commitments to the IMF and the need to protect revenues.
What happens next now rests with the leadership of both sides. The draft agreement worked on during Tuesday's meeting still needs to be reviewed and approved by the prime minister and the JI chief, and the government still has to complete its consultations with the IMF. If the meeting between Shehbaz Sharif and Hafiz Naeemur Rehman goes ahead in the coming days, it could settle a dispute that has dominated the political debate over fuel prices for months — or, if it fails, set the stage for a renewed confrontation on the streets.
