KARACHI, Dec 5: The government has paid Rs2 billion to oil marketing companies as a differential between local and international oil prices to save the public from the impact of higher global oil prices, says Prime Minister Shaukat Aziz.

He was speaking at a dinner hosted by the Overseas Investors Chamber of Commerce and Industry at the Governor House here. He said a comfortable fiscal situation had enabled the government to bear the burden of the oil price hike. The total impact of the rise in the international oil prices on national economy was Rs7 billion, he added.

"We have tried to insulate the public from the impact of oil prices to the extent we can. Our fiscal situation is such that we have been able to do that," Mr Aziz said.

He said that the fiscal deficit had been well within control during the first three months of the year but the government had not yet determined how the situation developed in the wake of the oil price volatility.

He said that oil companies should not worry about payments. "They are in the pipeline." Sindh Governor Dr Ishratul Ibad Khan, Chief Minister Dr Arbab Ghulam Rahim, Federal Minister for Ports and Shipping Senator Babar Ghauri and provincial ministers were also present on the occasion.

Earlier, Mr Aziz addressed workers of the Sindh chapter of the Pakistan Muslim League and members of the party's provincial cabinet. Welcoming new entrants in the party's fold on behalf of President Pervez Musharraf, he said that the PML believed in constructive politics and it should play an active role in national politics.

"The era of drawing-room politics is over," the prime minister said. "Our basic objective is to achieve maximum development in the country and we are striding ahead to achieve this goal. We put the national interest ahead of everything else."

The Prime Minister said instead of opting for raising hollow slogans "we are concentrating on tactical work and welfare projects" to expedite the resolution of public problems.

He said during his election campaign, he had observed maturity of voters and knew perfectly well who could solve their problems and who cannot. Mr Aziz said coalition governments had been formed in the Centre and Sindh.

Highlighting the importance of the dual-office bill, he said that the legislation under which President Musharraf could retain offices of president and chief of the army staff had been endorsed by both the houses. He said it was crucial for the transition period. After the strengthening of democracy in 2007, it would no longer be needed in 2007, the prime minister added.

Without mentioning the release of PPP leader Asif Ali Zardari, Shaukat Aziz said that the government believed in holding negotiations with everyone and sometimes reports about such negotiations appeared in the media while sometimes they did not appear. But, Mr Aziz said, it did not mean the government was striking any deal with anyone. The objective behind these meetings, he said, was to promote an atmosphere of reconciliation.

Referring to President of the PML Chaudhry Shujaat Hussain, Mr Aziz said he was expected back in Pakistan on Jan 12. Mr Shujaat Hussain is recuperating after undergoing medical treatment in the US, he added.

Focussing on the importance of the next year's local bodies election, the prime minister said a decision would soon be taken about conducting the polls on party basis or not. A decision, he said, would also be taken soon about holding nazims' elections directly or indirectly.

Emphasizing the unification of the PML, he said it was a "very important step". At provincial and district level office-bearers were being appointed to strengthen the party among the masses.

He said that the labour, youth, women wings and other sister organizations were being activated. Criticizing the opposition, he said that contrary to its propaganda, it had failed to muster public support for their protest meeting here.

The prime minister said he had discussed various matters, including the country's overall situation with MQM Chief Altaf Hussain on telephone on Saturday night.

He said that they had resolved that "we all will work ... for the development and well being of the country". The prime minister said the government was concentrating on development, adding that it would help generate jobs and strengthen the economy.

Reaffirming the government's commitment to Karachi development projects, the prime minister said the pace of work on the K-III water supply project had been accelerated and was nearing completion, Lyari Expressway was under construction, the Karachi Circular Railway was being restored, new roads and flyovers were being constructed and the initial survey for the mass transit project had already started.

Acknowledging Karachi's vital role in the national economy, the prime minister said that the government was paying equal attention towards the development of rural areas of Sindh. He especially mentioned the development carried out in the Thar area.

Shaukat Aziz said the government had been trying to eliminate poverty, especially in rural areas and a scheme had been launched to encourage the cottage industry.

Stressing the need for quick dispensation of justice, the prime minister said improvement in law and order situation and a sense of security were vital for attracting investment into the country. -APP