Subsidy on oil prices by Imran Khan govt has left Shehbaz Sharif administration distressed

Islamabad [Pakistan], April 19 (ANI): The capping of oil prices, amounting to a subsidy of 150 billion Pakistani rupees per month, by the Imran Khan government towards the end of its tenure has become a major concern for the present government that sees it as a trap to sabotage the Shehbaz Sharif-led administration, reported local media.
The huge oil subsidy has become worrisome for the new government, which is finding it difficult to revoke the capping, however, continuing the subsidy and a static oil price will cost Pakistan even more than the defence budget, reported The News International citing an official source.
The source further said that the oil prices have become Hobson's choice for the government as no budgeting could possibly be done with an over PKR 150 billion subsidy on oil alone, however, raising the oil prices as per international market rates will invite a strong public reaction.
"We are praying for an early decline in the international oil price," the media outlet quoted the source that warned that such a heavy subsidy would never be acceptable to the International Monetary Fund (IMF).
He stressed that the IMF programme is a must to get the country out of the present economic mess.
According to former Prime Minister Shahid Khaqan Abbasi, who reportedly briefed the premier Shehbaz Sharif on the oil-related financial crisis, the petrol that costs the government PKR 171 per litre is sold at around PKR 150 per litre while the diesel that costs the government PKR 196 per litre is sold at PKR 144 per litre.
Noting that no country could afford to pay such a big subsidy on oil products, Abbasi informed that as per the previous government's commitment to IMF, petrol should cost PKR 235 in the country while diesel should cost PKR 264 per litre.
The oil prices problem is said to be the most pressing issue left by the Imran Khan administration for the Shehbaz Sharif government, which would have to raise the prices incrementally to secure the IMF programme. However, a severe price hike means more inflation which will cause public uproar benefitting Imran Khan in the next elections, according to the media outlet.
Meanwhile, former finance minister Shaukat Tareen has dismissed the capping of oil prices as an unwise decision claiming that the finance ministry had reallocated resources from different heads to generate around PKR 456 billion to subsidize oil prices till June this year. (ANI)