Finance ministry opposes the idea of providing subsidy on Oil Prices
Wednesday, February 29th, 2012 5:59:45 by Wajahat Javed
Finance ministry opposes the idea of providing subsidy on Oil Prices
Tuesday, February 28, 2012: After the increase in Price of CNG (Compressed Natural Gas) the next gift in-stored for the people of Pakistan is the rise in price of petroleum products.
Oil and Gas Regulatory Authority (Ogra) tried its best to persuade the Finance ministry and planning commission to share the burden and provide subsidy on petroleum products in March but their efforts went to vain as both ministries
rejected the proposal.
Dr Abdul Hafeez Sheikh, adviser to the Prime Minister on Finance and Revenue, said, “The state of the economy does not allow the government to provide subsidy on oil prices.”
Another senior official also shared his views on the prevailing issue, he said, “If the government decides to keep oil prices unchanged, it would need to increase its borrowing level, print more currency notes and swell the size
of the budget deficit.”
The Planning commission defended the decision by saying that Pakistan government, which is already heavily indebted, cannot take the burden of global increase in prices of oil. Therefore, the increase of Rs8.67 per litre has to
be transferred to end user.
Dr Nadeemul Haque, Planning Commission Deputy Chairman, floated an idea to provide subsidy to motorcyclists by giving discount cards while he opposed a subsidy for cars and other vehicles saying that they could afford the hike.
However, the decision is not final as yet because the special committee to review oil prices will once again meet on Wednesday to finalize their decision.
The price of high octane will go up by Rs8.67 to Rs126.87 per litre, petrol by Rs2.75 to Rs97.66, Light Diesel Oil (LDO) by Rs3.08 to Rs93.29, High Speed Diesel (HSD) by Rs106.28 and kerosene by Rs4.38 to Rs96.40 per litre for
the month of March due to hike in global oil prices, according to Ogra estimates.
The government on Monday, had already raised the prices of CNG by Rs1.06 in various parts of the country.
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Posted by Wajahat Javed
on Feb 29 2012. Filed under Business, Pakistan.
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