Pakistan’s oil Bill and End of Subsidies

Pakistan’s oil Bill and End of Subsidies

With rising crude oil prices and no ease in these prices in the foreseeable future,
the government in its budget for FY’09 has fixed average crude oil prices at
US$110/bbl for subsidy calculation purpose. The total amount of subsidy that was
provided during FY’08 almost equaled US$160b. The WB and IMF have asked the
government to totally withdraw subsidies by the end of the calendar year. At present
the subsidies on HSD stands at Rs37.07/liter while that on gasoline is Rs7.15/liter.
The country’s oil import bill is likely to touch US$13b during the current financial
year as it has already ballooned to highest ever level during the July-May period as
compared to US$7.33b in FY’07. The oil import bill during 11mths’08 went up by
52.2% to reach US$10.09b from US$6.6b during the same period last year.