Pakistan’s monthly fuel subsidy reaches US$58 million

Subsidies on retail prices of petroleum products is costing the Pakistani government Rs5 billion (US$58.5 million) per month. Domestic retail prices have not kept up with the rise in crude oil in the international market, it was reported in the local press. While prices have risen by 27% in the international market, domestic prices have only been adjusted by 4.95% in March. In 2010, the government had announced a set of economic reforms targeted at restructuring the tax system and dealing with the energy subsidies. The proposed strategies could have gone a long way in reducing the budget deficit which is currently more than 5% of gross domestic product, but the reforms were not successful. (March 9, 2011)