ISLAMABAD, March 10: Saudi Arabia has offered a one-time $300 million budgetary support to Pakistan to help bridge the fiscal gap caused by constantly rising oil prices.

A finance ministry statement issued here on Monday termed it a goodwill gesture and said the Saudi government decided to provide the grant following a request made by President Pervez Musharraf to King Abdullah to help Pakistan in offset the effects of high oil costs.

The statement termed the Saudi government’s decision ‘very timely’ and said it will help Pakistan in meeting the budgetary gaps effectively and (help) promote macroeconomic stability in the country.

Finance Minister Dr Salman Shah said the grant would help the new government to avoid any massive increase in prices of petroleum products.

Denying that the caretaker government planned to increase oil prices before handing over power to the new government, he said: This is good that the new government will not have to go for excessive oil price increases in the second phase. The caretaker government had raised power charges by 9 per cent and increased petrol and diesel prices by Rs5 and Rs3.5 a litre on Feb 29.

Asked if the Saudi government had restored an old facility, the finance minister said that it was a one-time budgetary support.