The federal government on Monday notified the establishment of a new price stabilization fund for petroleum products, in line with a decision of the federal cabinet, to mitigate the impact of potential future price shocks on consumers.
“All proceeds received in the name of the Petroleum Prices Stabilization Fund will be credited to the Public Account of the Federation under the major head ‘Special Deposit Fund’,” read the notification issued by the Ministry of Finance.
According to the notification, the Finance Division, the Petroleum Division, and the Oil and Gas Regulatory Authority would finalize the modalities of the Fund, including the operating procedures for governing it. All necessary approvals for the same, it said, would be sought separately.
The federal cabinet had approved the formation of the fund on June 5 in light of the massive price hikes resulting from supply disruptions caused by the Iran war. Reportedly, the resources parked in the Fund would be utilized to make weekly adjustments to petroleum prices to minimize the impact of sudden price shocks on consumers.