ISLAMABAD: Ahead of Pakistan’s talks with the International Monetary Fund (IMF) for the revival of the $6 billion loan programme, the government is mulling to withdraw the subsidy on the petroleum products in a gradual manner.
According to the sources, the government has received a summary from the Oil and Gas Regulatory Authority (OGRA) for the POL prices from May 16.
The government is likely to gradually abolish subsidies on all the petroleum products, the sources privy to the matter said as the decision about the fuel prices for the next fortnight is expected on Sunday (tomorrow).
Federal Defence Minister Khawaja Asif, who was in London along with PM Shehbaz Sharif holding discussions with the party supremo Nawaz Sharif to finalise the strategy, said that “major decisions” will be taken in the next 48 hours to address the ongoing financial crisis.
At present, the government is providing Rs29.60 per litre subsidy on petrol, the sources said, adding that the fuel subsidy will cost the national kitty Rs45.14 from May 16 if the prices of petrol are not increased.
The price of petrol will surge to Rs190 per litre if the government withdraws all the subsidy on it, said the sources.
Likewise, the government is giving Rs73.04 per litre subsidy on diesel and Rs43.16 on kerosene. The rates of diesel and kerosene will jump to Rs230 and Rs176 per litre if the subsidy is abolished.
However, if the prices of diesel and kerosene are not increased, the government will have to give subsidies on the products by Rs85.85 and 50.44 per litre respectively from May 16.
In addition to this, the government is providing Rs64.70 per litre subsidy on light diesel currently and it will increase to Rs68 from Monday if the prices are maintained.
Light diesel will be sold at Rs186.31 per litre if the government withdraws all the subsidy on it, the sources added.
OGRA has apprised the federal government about the growing subsidy on petroleum products, the sources said.
The Ministry of Finance will make the final decision on the prices of petroleum products after consultation with the prime minister.