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HomeWorldPakistanFuel subsidies cost government Rs 40 billion in two weeks - newspaper

Fuel subsidies cost government Rs 40 billion in two weeks – newspaper

ISLAMABAD: national Kitty will take 40 billion rupees hit in in next two weeks like government saved prices of subsidized petroleum products unchanged for two weeks up until May 15th.

However, sources in in government said oil prices were likely to rise for in second two weeks of Can not only compensate for growth price differential requirements (PDC) for oil companies, but also fulfill the conditions of the International Monetary Fund.

In a statement on On Saturday, the finance ministry said the prime minister had instructed to keep oil prices unchanged until avoid burden on citizens.

“In a two-week review of prices for petroleum products, prime minister rejected the offer of Ogre [the Oil and Gas Regulatory Authority] for increase in Prices of oil products,” the Ministry of Finance said in a statement.

Read: Fuel prices: Mifta says ‘No chance’ of immediate hike but wont rule out possible cancellation of the subsidy

As result per liter price of gasoline will remain Rs 149.86 high-speed diesel Rs 144.15, kerosene Rs 125.56 and light diesel fuel Rs 118.31.

With this decision, another 40 billion rupees was added in PDC payable government to oil companies. Weight of these claims will go to the state-owned Pakistan State Oil Company (PSO).

Sources in oil division said preliminary amount The PDC was 76 billion rupees. for April and 31.3 billion rupees for March. total influence of the subsidy will be about 90 billion rupees. for Maybe if government According to them, oil prices remained unchanged during the month.

Maintaining the fuel subsidy “will not only burden national kitten but also affect the financial performance of oil companies, especially of JI because government releases for PDCs are always delayed”, senior official of oil division said.

officials added what total influence of PDC has been valued at Rs 200 billion since March, while government so far issued 71.3 billion rupees since price differentiated requirements for oil companies, in particular national and multinational private firms.

On the other hand, if government cancels current price differential requirements of subsidy on petroleum products, etc. price of diesel can rise to 216.48 rupees per liter and what of gasoline up to 180.17 rupees per liter.

But it could hurt the overall economy as diesel is widely used as a commercial fuel. in transport and agriculture, and even operating large generators among power shutdowns across the country. Therefore, the increase in diesel prices will bite up inflation.

An expensive diesel will also harvest wheat costly as tractors run on the fuel powers the threshers and transports the produce to its destination.

Likewise, high gasoline prices will have a greater impact on urban dwellers, especially when its alternative, CNG, is not available in the country.

Published in Dawn, May 1, 2022

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Derrick Santistevan
Derrick is the Researcher at World Weekly News. He tries to find the latest things going around in our world and share it with our readers.

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