LAHORE, Oct 6: The Punjab government will start releasing wheat to millers from Wednesday at a price of Rs330 per 40 kilogramme.

To begin with, the Punjab Food Department plans to release 8,000 tons a day, which could be increased progressively as wheat from the private sector is consumed.

According to food officials, the guiding principle remains food security of the province and releases would fluctuate accordingly.

Meanwhile, the government has decided to increase the price from current Rs330 to Rs345 next year. Next review of price is due on Dec 1, followed by another one on Feb 1 next.

But practically, the price may not touch the optimum level of Rs345 per 40 kgs as the release of the commodity has already been delayed by one-and-a-half month, creating a surplus of around 200,000 tons with the department.

The department is also uncertain about the exact quantity of wheat lying with the private sector. Theoretically speaking, the government has reduced the price to lessen its burden of Rs1.3 billion subsidy. According to one estimate, if the department is able to sell around 2.2 million tons of wheat, it might be able to reduce subsidy substantially if not wipe it out entirely.

The government has also decided to continue with the policy of recovering price of gunny bags from the millers against their demand of some relief on this account.