In a significant move toward financial digitization, the federal government of Pakistan has established a seven-member committee tasked with developing a comprehensive mechanism for enabling digital payments at fuel stations nationwide. The initiative, spearheaded by Finance Minister Muhammad Aurangzeb, is part of a broader government strategy aimed at minimizing cash transactions and encouraging the use of digital payment platforms.
The committee will be chaired by Sharjeel Murtaza, Chief Digital Officer at Karandaaz Pakistan, and includes a range of senior officials and experts representing key government and regulatory bodies. Notable members include Ali Jan Khan, a digital reforms consultant at the Federal Board of Revenue (FBR), along with senior representatives from the FBR itself, the Oil and Gas Regulatory Authority (OGRA), the Oil Companies Advisory Council (OCAC), and the State Bank of Pakistan (SBP).
Karandaaz Pakistan will serve as the technical and secretarial support provider for the committee. Its role will be crucial in shaping the policy and presenting the final proposal to both the Ministry of Finance and the FBR. The outcome of the committee’s work is expected to be unveiled as part of the upcoming federal budget.
The planned mechanism aims to implement differential taxation and transaction pricing to favor digital payments over cash, specifically within the fuel retail sector. Sources familiar with the matter report that the government has already been working on the technical elements of this plan, indicating a strong commitment to transitioning Pakistan from a cash-heavy economy to a low-cash and eventually cashless system.
According to the proposed structure, all fuel stations in the country will be mandated to offer digital payment solutions. These will include QR code scanning, debit and credit card payments, and mobile-based payment services. As a financial incentive, customers who pay through digital means will be charged the official government-notified fuel price, while those opting to pay in cash will face an additional charge of Rs2-3 per liter.
This move mirrors other recent digital-first policies, such as higher toll charges for cash-paying motorists on motorways and a reduced General Sales Tax (GST) rate for digital transactions at restaurants in Islamabad. These policies have set a precedent for how digital incentives can be rolled out effectively in different sectors.
Beyond promoting digital adoption, the new payment system will also enhance the government’s ability to monitor fuel distribution and sales more accurately, thereby improving transparency in the sector. The Chairman of the FBR has noted that revenue generated from cash transaction surcharges at petrol stations may be redirected back to consumers through periodic adjustments in petroleum prices.
Furthermore, the plan includes a provision for digital transaction-based tax enforcement. Importers and manufacturers will be required to apply a standard 18% GST on digital transactions and an additional 2% GST on cash payments. This dual-rate structure is intended to push businesses and consumers alike toward the digital economy, creating a more traceable and efficient financial system.
As the federal budget nears, the government’s push for a nationwide digital payment infrastructure, starting with the fuel sector, marks a bold step in reshaping the country’s financial landscape and improving tax compliance.
