The federal government on Friday decided to maintain prevailing rates of petrol and diesel for a week by providing a Rs. 23 billion subsidy to offset the surge in prices in the global market.
In a notification, the Ministry of Energy said the government was leaving the petroleum levy on both petrol and diesel unchanged, imposing Rs. 105.37/liter on the former and Rs. 55.24/liter on the latter. To maintain the ex-depot rates of the fuel, the government is providing Rs. 23 billion in subsidies that would be paid to oil marketing companies (OMCs) in the form of price differential claims by the Oil and Gas Regulatory Authority (OGRA).
The ministry said the subsidy covered the period from March 14 to March 20 and is equivalent to the government providing a subsidy of Rs. 49.63/liter on petrol and Rs. 75.05/liter on diesel.
The federal cabinet has also approved the establishment of a “Prime Minister’s Austerity Fund,” the ministry said. The Cabinet’s Economic Coordination Committee has approved the transfer of Rs. 27.1 billion to the fund, of which PKR23 billion will be transferred to OGRA for the payment of the price differential claims.
The payment mechanism would include verification and auditing of bills submitted by OMCs, the ministry said, adding the director-general (Oil) has also written a letter to OGRA in this regard.