While the budget deficit breaks all records, the government opposes an increase in local oil and electricity prices for political reasons.
However, in doing so, the Treasury short of money is bound to face serious consequences, the fact that international oil prices are on a steady increase, says a research report released Friday by the Securities Topline.
In January this year, the price of Saudi light crude oil - a benchmark local companies for exploration and production (E & P) - has increased by eight percent to $ 96 a barrel.
If this trend continues, Oil and Gas Regulatory Authority (Ogra) meeting later this month to decide the price of local oil in the month of February has a crucial impact on the state budget, according to Farhan Mahmood Topline Securities.
If the government keeps the current price level is expected to give up its oil Levy (PL) - currently a tax on petroleum products, valued at Rs4.4 per liter on gasoline and diesel. The government will have an impact of up to Rs 10 billion per month.
According to the National Electric Power Regulatory Authority (NEPRA) officials, the government granted a subsidy of Rs2.8 to RS3 per kilowatt hour (kWh), equivalent to 20 dollars per month Rs.
When the news arrived that the government may not be able to raise electricity prices every month, it can be difficult to deal with such huge subsidies.
When the government relies more on heating producing electricity using oil because of lack of access to the production of gas and hydropower, four percent increase in international oil prices will increase costs energy by Rs0.5 per kWh.
This means that the government will take a hit of nearly Rs4.5 billion a month, which could lead to monthly electricity subsidy dollars RS25 touch. However, the impact may vary depending on the availability of gas and hydropower.
Without major external inputs expected, the government will again depend on local borrowing to build probable budget deficit of six to seven per cent of gross domestic product (GDP), which represents between RS1 and Rs1.2 billion.
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