The Pakistani government has provided fuel price subsidies to more than 9 million low-income people, in an attempt to mitigate the impact of rising energy prices on families, as the repercussions of the war between the United States and Iran continue to push fuel prices to higher levels.
The Minister of Information Technology, Shaza Fatima Khawaja, said on Tuesday that the program aims to alleviate the burdens on millions of citizens, at a time when geopolitical tensions in the region have led to a rise in global fuel prices.
She added that the government was keen to make the mechanism for benefiting from the program “smooth and flexible” for citizens, and described it as the first nationwide operation in Pakistan that uses technology to provide targeted fuel support.
The rise in gasoline and diesel prices has increased pressure on an economy suffering from a scarcity of liquidity and high inflation, which has affected the costs of transportation, food, and other living expenses, and raised fears of anti-government protests.
Prime Minister Shehbaz Sharif approved the program last month, and it provides discounts on fuel to owners of motorcycles, rickshaws, and small cars who are eligible for support, many of whom depend on their vehicles for work and daily transportation.
The announcement of support came after the Jamaat-e-Islami Party, one of the most prominent Islamic political parties in Pakistan, threatened to organize a march to Islamabad to pressure the government to reduce taxes on gasoline and diesel.
Fuel prices in Pakistan have risen by more than 50 percent since the outbreak of war between the United States and Iran earlier this year, increasing pressure on families already facing high costs of living.
Sharif's government said that the support aims to help low-income people buy gasoline at prices similar to those prevailing before the war.
Petroleum Minister Ali Parvez Malik said more than 9 million people benefit from the program, under which eligible vehicle owners receive a code via text message, then present it at a participating gas station, where attendants verify their eligibility before applying the discount.
According to the Ministry of Information and Communications Technology, the value of the support and the frequency of its disbursement vary according to the type of vehicle.
Motorcycle and three-wheeler users receive a discount of 500 rupees ($1.79) per week, with a maximum of four tokens per month, providing them with a subsidy of up to 2,000 rupees ($7.14) per month.
As for owners of cars whose engine capacity does not exceed 800 cubic centimetres, they receive a discount of 100 rupees (36 cents) per liter, for up to 10 liters of gasoline every 10 days. They can get three tokens per month, saving up to 3,000 rupees ($10.71).
Amir Shehzad, a resident of Islamabad, said that the support is sufficient to cover the costs of his transportation between home and work, but he added that if he needed to travel to another city, he would have to buy gasoline at the prevailing market price.
Pakistan relies heavily on loans from the International Monetary Fund, which demands that Islamabad reduce subsidies for wheat and other commodities.
Korean stocks fell on Wednesday, with investors reluctant to form new positions before the announcement of Samsung Electronics’ results, amid anticipation of the company’s assessment of the prospects for demand for artificial intelligence products, while the won rose slightly against the dollar.
The main KOSPI index fell 43.20 points, or 0.62 percent, to 6,898.19 points by 01:38 GMT.
Samsung Electronics shares rose 0.18 percent, after rising more than 2 percent earlier in the session, while SK Hynix shares fell 1.52 percent.
Samsung Electronics is expected to announce on Thursday that its operating profits for the third quarter increased by about nine times on an annual basis, supported by strong demand related to artificial intelligence, despite analysts reducing their profit expectations by about 8 percent since the end of August.
Han Ji-young, an analyst at Keum Securities, said that the local market's gains will remain limited due to anticipation of Samsung's results and caution ahead of a public holiday later in the week. South Korean financial markets will be closed on Friday for the holiday.
The performance of other major stocks varied, as the battery maker LG Energy Solutions rose 0.38 percent, while Hyundai Motor and Kia declined 2.16 and 1.95 percent, respectively.
“Posco Holdings” steel shares fell 2.36 percent, while “Samsung Biologics” pharmaceutical shares fell 1.91 percent.
Of the 911 shares traded, 415 shares rose compared to 438 shares that declined, while foreign investors recorded net share sales worth 865.3 billion won ($646.93 million).
In the currency market, the won rose to 1,338.3 against the dollar, from 1,338.8 at the previous close, an increase of 0.04 percent.
In the debt market, the price of three-year Treasury bond futures for December delivery fell 0.01 points to 102.62, while the yield on three-year Korean bonds, the most liquid, rose 1.4 basis points to 3.949 percent.
The benchmark 10-year bond yield also rose 1.1 basis points to 4.384 percent.
The dollar fell on Wednesday, as pressures eased in European bond markets, while investors awaited the minutes of the Federal Reserve meeting and the statements of a number of its officials, searching for indications of the path of interest rates in the coming months.
The dollar index, which measures the performance of the US currency against a basket of major currencies, fell 0.03 percent to 101.94, after falling 0.27 percent in the previous session. The euro fell 0.08 percent to $1.1249, while the Japanese yen fell 0.19 percent to 158.43 against the dollar, and the British pound fell 0.08 percent to $1.3262.
Later on Wednesday, the Federal Reserve will release the minutes of its meeting held on September 15 and 16, when it raised interest rates to confront inflation, amid a decline in the tone of central bank officials after the release of weaker-than-expected inflation and jobs data in the United States last week.
Gavin Friend, chief market strategist at National Australia Bank, said there was “less urgency” for the Federal Reserve to raise interest rates after weaker-than-expected personal consumption expenditures and jobs data.
Market bets on raising US interest rates in October declined sharply, as CME's Fed Watch tool indicates a 20.5 percent probability of raising interest rates by at least 25 basis points this month, compared to about 51 percent a week ago.
But markets still expect rate hikes to resume later in the year, pricing in an 84.5 per cent chance of a hike at the December meeting.
On the other hand, the head of the Federal Reserve in Kansas City, Jeff Schmid, said on Tuesday that the central bank still needs to raise the base interest rate further to reduce inflation, even with the impact of the rise in long-term bond yields on economic activity in some sectors.
Samara Hammoud, currency strategist at Commonwealth Bank of Australia, said that the markets react strongly to every release of US data and every statement by Federal Reserve officials, in light of the limited future guidance, adding that the bank is likely to wait until December before raising interest rates again.
Federal Reserve officials Christopher Waller, Neel Kashkari and Alberto Musalem are scheduled to speak later Wednesday, which may provide additional indications on monetary policy directions.
In Japan, member of the Board of Directors of the New Bank of Japan, Ayano Sato, said in an interview with Kyodo Agency on Wednesday that she supports raising interest rates in stages.
Sources familiar with the bank's thinking said that the Bank of Japan may indicate this month that core inflation is close to reaching its 2 percent target, an indication of its readiness to raise interest rates again.
Global bond yields have been rising in recent weeks due to expectations of interest rate hikes by central banks, in addition to concerns about public financial conditions.
In Europe, pressure on French bonds decreased after the far-right candidate for the French presidency, Marine Le Pen, pledged to reduce spending by up to 140 billion euros ($158 billion) if she came to power in 2027, compared to a previous plan that aimed to save 125 billion euros.
The call for early elections in Spain also added to the recent pressure on the euro.
The Australian dollar fell 0.04 percent to $0.6979, and the New Zealand dollar fell 0.07 percent to $0.5617.
In the cryptocurrency market, Bitcoin fell 0.22 percent to $85,438.59, and Ether fell 0.12 percent to $2,695.22.
