ISLAMABAD: The Economic Coordination Committee (ECC) authorized an Rs68.7 billion additional grant on Tuesday in its first meeting to cover the expense of supplying subsidized petroleum products – a figure that the government cannot afford to sustain any longer.
According to the Finance Ministry, the first ECC of the Cabinet meeting was headed by Minister of Finance Dr. Miftah Ismail, who authorized Rs68.7 for the payout of price differential claim (PDC) to oil marketing companies (OMCs) and refineries for April and to offset the gap for March 2022.
A total of Rs33.7 billion was relevant to the previous government’s period out of the Rs68.7 billion sanctioned for April (March 1 to 15).
For the second half of April, Prime Minister Shehbaz Sharif approved the continuation of an Rs21 per liter petrol subsidy and an Rs51 per liter diesel subsidy.
The ECC was informed that the petroleum levy and sales tax on gasoline and HSD have already been reduced to zero owing to the freezing of oil prices on March 1, 2022.
According to the Oil and Gas Regulatory Authority (Ogra), the PDC for the first and second fortnights of April 2022 is expected to be Rs31.8 billion and Rs35.73 billion, respectively, because of the continually rising trend of oil prices in the international market.
With a request to allocate Rs67.53 billion for the month of April 2022, the Petroleum Division has moved a summary for the views of the Finance Ministry.
Due to a lack of fiscal space, the Finance Division accepted Ogra’s forecast of Rs31.8 billion for the first week of April 2022 but did not support allocation for the second fortnight.
The Ogra further stated that the amount of PDC supplied under the extra grant for March 2022 is Rs1.87 billion short.