KARACHI
Finance Minister Miftah Ismail assured on Thursday that government will not apply any kind of new tax or levy would be imposed if patrol rates increases. In his presser today in Karachi he told that their government will try their best to maintain the patrol prices by not imposing the any new levy or tax.
He also told that government had previously sold the patrol in loss as economy could not afford and if patrol prices are not hiked in May, the treasury will loss 102 billion.
It is worth mentioning here that previous government has announced freeze on patrol and electricity prices till the new budget (till 30 June) on 28 February in series of measures to provide relief for public.
PML-N with their coalition government severely criticized the PTI first for failure to control patrol prices and later for derailing the International Monetary Fund (IMF) Program and in the recent meeting with Miftah, the IMF has linked the continuation of its loan programme with the reversal of fuel subsidies, which Pakistan cannot afford. But Prime Minister (PM) Shehbaz Sharif has now twice rejected the Oil and Gas Regulatory Authority’s (Ogra) summaries to increase fuel prices — a move that has been criticised by experts.
Ismail blamed the previous Imran Khan-led government for implementing policies that contradicted what was agreed by them during meetings with the IMF in Washington.
The government was currently accruing a loss of Rs30 per litre on petrol, he said, claiming the previous government had agreed to not only avoid a loss of Rs30 per litre but also impose a tax of Rs30 and 17pc sales tax.
The government was currently accruing a loss of Rs30 per litre on petrol, he said, claiming the previous government had agreed to not only avoid a loss of Rs30 per litre but also impose a tax of Rs30 and 17pc sales tax.
“The difference in their (PTI government’s) words and actions is Rs100,” he said. The incumbent government was losing Rs70 per litre on diesel, the finance minister shared, claiming that the burden of these subsidies had been placed on the public. In his press conference today, Ismail said if the current oil prices were maintained for May and asserted that no decision had been taken to increase them then the government would lose Rs102 billion.
“The entire monthly cost of running the civilian government is Rs45bn, including the courts, the education and police systems. We are accruing losses of Rs102bn only on fuel which is equal to the cost of running two and a quarter governments … This cannot happen.”
The finance minister elaborated that the government had to borrow Rs102bn from the market but liquidity had been tightened. The government could no longer borrow money from the State Bank of Pakistan (SBP) because of new laws related to its autonomy, he added.
“If I did that, the federal government would have to pay interest but it would come back to the State Bank. When the SBP lends to us, it means we are printing money which increases inflation.” However, when the government borrowed money from private banks, a few other factors came into play, including a higher interest rate, he said.
The interest rate was so high, the market had been shaken, he claimed, adding that when the government borrowed from private banks, they did not have enough money left to lend to the private sector which resulted in reduced investment and industrialisation.
In addition, banks did not have enough money left to open LCs (letters of credit), leading to increased inflation, he said. “When the big companies do not have money and banks delay opening LCs, then there is a shortage of fuel because of which load-shedding increases.”
