A senior official told Business Recorder on Tuesday that after President's 'No' to any change in existing policy there was no possibility of upward revision in oil prices for the next fortnight, commencing from December 16.
He said in the last cabinet meeting, Caretaker Prime Minister Mohammedmian Soomro was inclined to pass on at least some portion of rising oil prices to the consumers, but tough resistance from some ministers forced him to agree with the proposal to refer the matter to the President for his ruling.
Since May last when oil prices were capped at certain level, fearing that passing on the actual prices could add to the then government has absorbed roughly Rs 50 billion. For a few months, capped oil prices and subsequent subsidy was not a big issue for the government. However, upward trend in the prices for longer period started worrying the authorities. In the last couple of months of Shaukat Aziz regime, Oil and Gas Regulatory Authority (Ogra), Ministry of Petroleum and Finance made serious efforts to get the policy of capped oil prices changed but they could not succeed. Now in caretaker setup Ogra and related ministries again presented their case with a hope to get positive response but they met the same response of not passing the real prices to the consumers.
Sources said after differences in the last meeting of the cabinet, caretaker government had referred the case to the President for a final decision on the issue.
Now when crude oil prices are ranging between $90 and $100 per barrel, the government is absorbing on average Rs 14 billion every month as subsidy. Such a big hit is widening budgetary deficit and worrying the economic team of the caretaker government.
It wants to pass on the actual prices of the international oil market to the consumers to avoid more burden on the economy, but it lacks the courage to take such a hard decision. The purpose of seeking the President's ruling could only be that the caretakers wanted to pass on Shaukat Aziz government's buck to the president.