THE federal government has taken the time out of the judges' restoration to announce a new petroleum policy, to replace the 2007 policy, which includes among other things a provision for the production bonus to be spent on the social development of the areas in which the petroleum is extracted, and for such funds to be spent by a committee headed by the local DCO, and with the MNAs from the area being included as members. Previously, the bonuses were levied by the federal government, and were not necessarily spent in the area where they originated. The policy also set a minimum rate of $1 per million British Thermal Units for gas exploration, which is higher than the 2007 policy. That might mean higher gas prices when such gas finally is distributed to domestic and industrial consumers, but this is probably a competitive price when the IPI project is considered, for which the pricing formula is on the verge of being worked out. The increase of the wellhead gas price may well encourage more exploration at a time when demand is growing, there is an international crisis in all hydrocarbon fuels, and Pakistan is in its direst need of natural gas. The policy also continues, more ore less as its cornerstone, the link between the gas price and the international crude oil price that was prevalent before, but this is the first time that this has been fixed after the oil shock of the last year, when crude prices went up and up, for speculative reasons, not because of any relationship to demand. The policy thus accepts the international oil price as somehow fair, even though the recent shocks have shown that the international price of oil is not even related to demand and supply. This is the price which ultimately the domestic and industrial consumer will have to pay, while the gas distributing companies will go on making hefty profits. The purpose of the policy is to encourage exploration, which should happen because of the heavy profits on offer.