No plan to jack up oil prices, says Miftah

ISLAMABAD – Federal Minister for Finance and Revenue, Miftah Ismail on Tuesday said that there is no plan to increase the oil prices.

“In pre-budget seminar, I never even spoke about petroleum prices,” said finance minister on twitter. He further said that there is no summary or plan to raise petroleum prices. Meanwhile, Federal Minister for Information and Broadcasting, Marriyum Aurangzeb has also rejected further increase in oil prices.

The federal government, during last two weeks had increased the oil prices by Rs60 per litre to reduce the volume of subsidies to secure IMF’s next tranche of around one billion dollars. The government is still paying subsidy on petroleum products by bearing Rs9 per litre subsidy on petrol, Rs23 per litre on high speed diesel and Rs8 per litre on light diesel oil.

Earlier, addressing the pre-budget seminar, finance minister said that federal government had taken tough decision by increasing oil prices by Rs30 per litre twice. “It was a very difficult decision for any prime minister to increase the price of petrol by Rs 30 twice, but we have taken difficult decisions and will continue to do so,” the minister added.  He said that the government was forced to increase prices as it was losing Rs84 per litre on diesel and Rs69 per litre on petrol under subsidy. Subsidy on fuel was Rs120 billion per month, which was three times higher than running expenditures of the government, and the prime minister was against hike in prices of oil products, but allowed me on the condition to protect poor segment of the society, he said.

He further said that government had announced monthly stipend of Rs2000 per month for the families earning less than Rs40,000 per month, which would cover around one third population of the country.

Finance minister said, Pakistan would need external financing of $41 billion in next fiscal year. Sharing details, he explained that the government would repay previous loan of $21 billion and current account deficit has projected at $12 billion in the upcoming financial year. He was optimistic that government would arrange the financing. He expressed hope that Pakistan and IMF would soon reach on staff level agreement for the next loan tranche.

Miftah Ismail said that petroleum product prices would have touch Rs300 per litre if we follow the previous government’s agreement with International Monetary Fund (IMF). He said that former prime minister Imran Khan had discussed wheat and gas issue with Russia and there was no mention of oil import. He reiterated that the previous government had laid a trap for the incumbent government by providing the massive fuel subsidy. However, he assured the businessmen that the government would stabilise the economy.

He further said that economy is passing through a difficult phase but the government will control inflation alongside overcoming other challenges. He explained that budget deficit would widen to Rs5.6 trillion during current fiscal year mainly due to the economic policies of the previous government. Budget deficit jumped by 3.5 times when compared to the deficit of Rs1.6 trillion recorded four years back when PML- N government was in power, he added.    Ismail said that the government had prepared a ‘very progressive budget’, but would also focus on fiscal control and consolidation to reduce the budget deficit.

Finance Minister Miftah predicted that country’s GDP will grow by 5-6 percent, and the government would control the high rate of inflation.

He also revealed that the government has prepared a progressive fiscal budget, with the deficit reduced to below 5 percent. He criticised the economic policies of the previous PTI government. “In the past four years, 20 million people entered poverty while 600,000 became unemployed,” he said. “Every year, 1.8-2 million people join labour market of Pakistan and 5-6 percent economic growth can absorb them,” minister said, adding, Pakistan had the third highest inflation rate among all major economies of the world when Shehbaz Sharif assumed office. He said, Pakistan entered into an agreement with the International Monetary Fund (IMF) last December,  and signed a deal in February that promised primary deficit at Rs25 billion.

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