Govt mulls revising petrol prices

Finance ministry expected to brief Gilani on economic effects of reversing the petrol price hike.

ISLAMABAD: The government is mulling a revision in the petroleum price hike that is cited as one of the reasons for the current political crisis.

The Pakistan Peoples Party (PPP) is considering reversing the price of petroleum products in an effort to appease the Muttahida Qaumi Movement (MQM) which recently pulled out of the coalition government plunging PPP into a crisis forcing it to seek new allies.

The Finance ministry is expected to brief Prime Minister Yousaf Raza Gilani today (Tuesday) on the economic effects if the government reverses the current increase in petroleum prices.

Sources said if the government withdraws the recent hike in POL prices the economy will be burdened with Rs4 to 5 billion and the government would have to give a subsidy. Federal Bureau of Revenue (FBR) officials said the tax collection process will suffer if the government decides to give a subsidy to the people. Moreover, the decision is also expected to undermine agreements signed with the international donors for gradual withdrawal of subsidies.

Oil and Gas Regulatory Authority (OGRA) officials are also scheduled to attend the meeting.