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The Alaskan authorities distributed a check of over $3,000 to almost all residents of the state in payment from its investment fund that gets filled up from oil profits.
Called the Permanent Fund Dividend, the payment amounts to $2,622 per resident but the state added another $662 in a bid to help Alaskans with higher energy bills, the AP reported.
“We’re experiencing record high inflation that we haven’t seen since the first PFD was paid in 1982,” Alaska Governor Mike Dunleavy said in a video address. “Alaskans have been bearing the brunt of this inflation from the gas pump to the grocery store, and this year’s PFD will provide much needed relief as we head into winter.”
The investment fund dividends are paid out every year but residents need to apply for them on an annual basis and there are residency requirements to qualify as eligible for the payments, the AP explained in an earlier report.
The fund was set up in the 1970s and, to date, its value is calculated at some $73.6 billion.
Alaska has benefited from its oil industry but there have been problems as well, boiling down to the over-dependence on oil funding for various public projects.
Earlier this month, for instance, media reported that bonus K-12 funding for schools in the state was under threat because of lower oil prices projected for next spring. The bonus funding amounted to $1.2 billion, based on expected oil prices.
It turned out a Department of Revenue oil price forecast made earlier this year may have been too optimistic, seeing crude at $101 for the period between July 2022 and June 2023 - Alaska’s fiscal year. Because of the recent sustained decline in oil prices, the Revenue has updated its forecast, now expecting oil to average $91.96 per barrel over the fiscal year.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com