The Finance Ministry on Wednesday announced it has disbursed a tranche of Rs. 27 billion to the Oil and Gas Regulatory Authority (OGRA) as a fuel subsidy in light of Prime Minister Shehbaz Sharif’s decision to maintain fuel prices amidst a global supply crisis.
“On the directions of the prime minister, OGRA has been provided the first tranche amounting to Rs. 27 billion, from Prime Minister’s Austerity Fund, to settle the price differential claims arising from the government’s decision to shield the consumers from the impact of rising oil prices in the international market,” read the statement.
It said the funds had been arranged through various expenditure reduction measures implemented within the federal government and deposited in the P.M. Austerity Fund. It said the government is also considering additional cost-cutting measures to ensure that the relief to the public is provided while staying within the budget and identifying additional savings.
Last week, the prime minister directed the petroleum ministry to keep the prices of high-speed diesel and petrol unchanged. The ministry said the government would pay the price differential on both to oil marketing companies.
The estimated differential for March 14-20 stands at Rs. 23 billion. Analysts estimate the total differential to reach Rs. 69 billion with the additional impact of March 20-27.