Hopes for relief as world oil price falls -DAWN


July 25, 2008	Friday	Rajab 21, 1429

Hopes for relief as world oil price falls

By Ihtasham ul Haque

ISLAMABAD, July 24: The government may revise the prices of petroleum products downward if the oil prices continue to decline in the international market.

Sources told Dawn that the newly-formed Economic Advisory Council has proposed to the government to provide relief to the poor by providing subsidies and lowering oil prices.

The much talked about subsidy announced in the budget for 2008-09 is still to be offered to vulnerable groups.

Initially, the government had planned to provide subsidy to five to six million households for which Rs34 billion had been earmarked, to be gradually raised to Rs50 billion. The prime minister had been advised to urgently start offering cash grants of Rs1,000 to qualifying households.

“We would urge the prime minister and other senior officials to reduce oil prices, if these continue to come down in the international market, to help the people fight inflation,” Economic Advisory Council’s convener Shaukat Tarin said. He said the government was still giving subsidy on diesel and kerosene but not on petrol.

“Since oil prices are causing more and more problems, we would want the government to revise them considering their downward trend in the international market,” he said.

Mr Tarin said that a number of new austerity measures were also discussed at a meeting with the prime minister, including a reduction in unnecessary expenditure.

He said the prime minister was convinced that without generating adequate revenue, the government could not extend any tangible relief to the people.

The meeting, he said, discussed the effects of the price hike and proposals to initiate programmes to protect the poor from inflationary effects of fuel and gas price increases.

Mr Tarin also said that controlling the fiscal deficit was the foremost need to stabilise the economy.

He said the prime minister directed his economic team to take measures to improve the balance of payment position.

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