Finance Minister Ishaq Dar has proposed putting an upper cap on oil prices by oil producing countries to help developing countries manage oil import bills.
More than $15 billion per year of oil imports are the largest drain on Pakistan’s foreign exchange reserves and constitute a major chunk of over $40bn total imports. Lower international oil prices help the government contain its trade and current account deficits.
The statement came after the Organisation of Petroleum Exporting Countries (Opec) decided to continue with existing pace of supplies to discourage US shale output, causing the price to stumble to a five-year low.
“There should be an upper capping so that oil prices are not raised unrealistically,” the Ministry of Finance quoted Dar as telling a popular Russian channel, Today TV.
He said now that developing countries were importing much larger quantities of oil, it would be convenient to oil producers if there was a ceiling price fixed. He said undue surge in oil prices nearly cripples middle level economies.
