ISLAMABAD - Federal Minister for Planning Asad Umar has said that to provide relief to the poor segment of the society the government is launching a targeted subsidy programme and the Prime Minister will announce it in the next few days.
The federal minister also announced that the prices of edible oil will be reduced by Rs 45 to 50 per Kilogram in the coming days as the government has decided to slash the GST and Custom Duty on the edible oil by 50 percent.
While addressing a press conference here Monday, the Federal Minister for Planning, Development and Special Initiative, Asad Umar said that the GST on edible oil is being reduced from 17pc to 8.5pc, while Custom duty is being reduced from the existing Rs 10000 per ton to Rs 5000 per ton. Similarly 2pc additional custom duty on the edible oil is being abolished, the minister said, adding that all these measures would help reducing the cooking oil prices in Pakistan by around Rs 45 per kg to Rs 50 per kg.
Asad said that formal notification in this regard will be issued on the return of Finance Advisor Shaukat Tarin from abroad.
Regarding high flour prices in Sindh, the Federal Minister for Planning Asad Umar has blamed the Sindh government for increase in wheat flour prices, saying that it is Rs 290 per 20kg higher than Punjab mainly due to release policy of the provincial government.
Prices of edible oil will be reduced by Rs45 to 50 per kg in coming days
Punjab and Sindh are both wheat producing provinces but the price of 20kg bag is Rs 290bn higher in Sindh than Punjab. He urged the Sindh government to release wheat so that the price of flour in the province could come down significantly.
The planning minister said the world was passing through a critical and extraordinary period of extremely high commodity prices, which has equally affected Pakistan. He said the prices of petroleum products and other commodities were still low in Pakistan compared to other regional countries mainly due to smart lock down policy during COVID-19.
He said the COVID pandemic had badly affected the big economies including US, China, UK and other developed countries where the economic growth went down by over 10pc. Now as the sectors are being opened up in across the world, the demand of commodities had surged that created shortage in the market leading to price hike in across the world, he added.
Asad Umar, however hoped that the prices of basic commodities might start receding from next year. However as per projection of the experts the prices of the commodities might start receding to normal level from March to June next year, he added.
The minister informed that in order to protect poor segment of the society from shocks of inflation, all the arrangements for the targeted subsidy have been completed. Prime Minister Imran Khan would announce details of targeted subsidy programme in few days. The people would start getting relief through the programme from November.
The minister said according to the World Bank, crude oil witnessed 81pc increase in one year while in Pakistan petrol price was increased by only 17pc. Similarly price of Liquified Natural Gas (LNG) surged by 135pc during the period while it increased by 64pc in Pakistan. Asad Umar said that that in Pakistan the share of indigenous gas is 75pc of the total consumption and during last 12 months the price for domestic gas did not increase.
Similarly, he said price of cooking oil rose by 48pc in international market and 38pc in Pakistan, that of sugar surged by 53pc internationally and 15pc in Pakistan, Urea fertilizer price surged by 67pc in international market and 28pc in Pakistan.
The minister admitted that although the prices of the commodities are comparatively low but still a significant hike has been witnessed in Pakistan too thus badly impacting the purchasing power of common men.
With respect to taxes on petroleum products, Asad Umar explained that earlier the GST on petrol was 17pc and Petroleum Development Levy (PDL) was Rs 30 per liter, however in order to protect the consumers from the impact of hike in international crude oil prices, the government had reduced GST to 6.8pc and the PDL to Rs 5.6 per liter.
Similarly, GST on High Speed Diesel had also brought down from 17pc to 10pc and PDL to Rs 5.14 per litre. However, he said that the customs duty per liter was increased to Rs 9.27 on petrol and to Rs 8.81 on HSD.
He said that under Ehsaas programme, the government was providing relief of over Rs 260 billion compared to Rs 121 billion in 2018. Replying to a query, the Asad Umar said Prime Minister did not wait for the International Monetary Fund (IMF) programme and initiated reforms in key sectors even before the programme.
To another query, the minister said the incumbent government had taken actions against various mafias and cartels, however he regretted that since the cases were pending in court so the government was helpless in punishing the culprits till the conclusion of the case.
When asked why the present IMF programme was very strict and inflexible, the minister explained that due to worst economic policies of the previous government, macroeconomic sectors needed drastic reforms therefore the IMF was very strict.