Govt bears Rs104bn loss monthly on POL products

March 09, 2022 (MLN): With the increase in international prices and Prime Minister’s relief package, the government is bearing the burden of over Rs104 billion per month only for the sake of common people to provide petroleum products on subsidized rates, Finance Minister Shaukat Tarin said in a press conference today.

Now, Petroleum levy (PL) and Sales Tax (ST) reduced to zero percent except for petrol which is Rs1.8 per litre.

The estimated budget loss in the next 4 months would be Rs250-300 bn just from petroleum relief with the assumption of $100/bbl weighted average international price.

He hoped that the ongoing talks over the 7th review with the International Monetary Fund (IMF) for the release of the next tranche would conclude successfully despite the huge subsidy on the petroleum products and the electricity announced by Prime Minister Imran Khan.

"The IMF should not worry about it as neither we will take any loan nor increase our fiscal budget to manage the subsidy, but the required money would be managed by diverting dividends from shareholdings in state-owned companies (SOEs), cutting development funds from Public Sector Development Programme (PSDP), and additional revenues collected during the current fiscal year, while some of the funds would be diverted from Ehsaas Programme," he said while addressing a press conference here.

"We have conveyed to them (IMF) that our people are already on roads against hike in prices of the basic commodities, therefore we have no option but to provide relief to the people," he added.

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