Pakistan freezes oil prices for a fortnight

June 1st, 2008 - 2:50 pm ICT by admin  

Islamabad, June 1 (IANS) Concerned over inflation, Pakistan has frozen the prices of petroleum products for the next fortnight. “This is the second consecutive decision taken by the premier to save the people from the inflationary bomb,” The News said Sunday.

Prime Minister Yousaf Raza Gillani had May 15 rejected a recommendation of the finance ministry to increase prices of petroleum products.

This time, the Oil and Gas Regulatory Authority (OGRA) had asked for hikes of Rs.6 per litre for petrol, Rs.9 per litre for diesel and Rs. 10.50 per litre for kerosene in keeping with their increased prices in the international market - but the government turned this down.

“The government is striving hard to keep the fiscal deficit within the envisaged target of 6.5 to 6.7 percent of the GDP (gross domestic product). The decision to freeze oil prices would make it harder for the economic managers to achieve the target for fiscal 2007-08 (that ends June 30),” The News said.

A senior finance ministry official said it had recommended “a reasonable increase” in prices but Gillani preferred to freeze the prices for the next fortnight.

According to the official, the government would be increasing the subsidy on petroleum products to Rs.153 billion for the current fiscal.

The price freeze means that the subsidy on diesel would rise from the current Rs.27.81 per litre to Rs.39 per litre, an official of an oil marketing company said.

In Pakistan, petrol is currently priced at Rs.68.81 per litre, diesel at Rs.50.12 per litre and kerosene at Rs.41.44 per litre.

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