The government has decided not to increase the prices of oil products till the coming budget in the wake of skyrocketing food inflation that has made life miserable for the poor consumers, sources told Business Recorder on Monday.
The subsidy the government pays to the oil companies for providing relief to consumers would be met through cut in Public Sector Development Programme (PSDP) as some of less important uplift projects have been suspended. Increase in oil price has a multiplying effect on the prices of other consumer goods with the increase in transportation and fuel charges.
Moreover, the pubic sector non-development expenditure will also be slashed to decrease the deficit. However, the Oil and Gas Regulatory Authority (Ogra) will keep following its mechanism for determining oil prices fortnightly.
The Ogra had issued a notification that petroleum products prices would remain unchanged for the period from May 16 to 31. The Ogra had worked out the difference in petroleum products prices in the world market during the last two weeks and recommended the government to pass on some fraction to the consumers.
The Prime Minister rejected it, with the comments that any upward revision in the oil prices would bring unbearable financial burden on the people. He also referred to the recent price hike which, in his view, was the outcome of last two upward revisions in the oil prices.