ISLAMABAD, Aug 10: As international oil prices recede, a high-powered committee on oil has directed ministries of finance and petroleum to ensure that petroleum subsidy does not cross Rs140 billion envisaged in the budget to contain fiscal deficit.

Informed sources told Dawn that a decision to this effect was conveyed to the two ministries by Chairman of National Reconstruction Bureau Dr Asim Hussain and his unofficial adviser Wamiq Zuberi during a recent meeting with representatives of oil companies and refineries.

The sources said the committee was informed that the subsidy on oil products had already exceeded Rs72 billion over the past two months (June-July) and hence it might become difficult for the government to remain within budgetary targets.

It was against this background, the sources said, that the government imposed Rs5.49 per litre petroleum development levy on motor spirit (petrol) and Rs7.82 per litre on high octane blending component (HOBC) in addition to 16 per cent general sales tax on all petroleum products although international prices had declined from an all-time high of $140 per barrel to $122.

The government had reduced dealers’ commission and oil marketing companies’ margin and capped at the international oil price of $100 per barrel because of 40-50 per cent rise in their profit in four months. The OMCs margin was reduced from Rs2.12 per litre to Rs1.59 on petrol, from Rs2.44 per litre to 1.85 on HOBC, from Rs1.45 to Rs1.21 on kerosene and from Rs1.43 per litre to Rs1.21 on light diesel oil.

Likewise, the dealer commission was also reduced.