Govt likely to pocket Rs100bn from low crude prices: The News

By Mehtab Haider

ISLAMABAD: The government is all set to break the record of last 60 years by earning substantial revenues of over Rs100 billion by not passing on full benefits of reduced prices of crude oil in the international market to domestic consumers, it is learnt.

The government is reluctant to cut prices because it wants to meet the fiscal deficit target of 4.2 per cent of gross domestic product (GDP), equivalent to Rs562 billion. In the remaining four months (March to June) of the current fiscal year, the government has no plan to pass on benefits of reduced prices in POL products to the consumers due to a substantial revenue shortfall being faced by the Federal Board of Revenue (FBR).

The Nawaz Sharif government in 1998-99 had collected Rs72 billion by not passing on low prices of crude oil in the international market to the local consumers when prices had tumbled to $10 to $15 per barrel.

“So far the government has earned Rs55 billion by pocketing around Rs15 billion per month,” a high-level official in the finance ministry said while talking to The News here on Monday. According to the official data obtained by The News, the monthly oil import bill stood at $1.319 billion in September 2008, which declined to $403.6 million in Dec 2008.

The government is saving around $900 million a month because of reduced POL prices in the international market. According to Adviser to the Prime Minister on Finance Shaukat Tarin there was a need to keep in focus the whole picture of economy as defence expenditures have gone up and FBR revenues have fallen.

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