Miftah justifies increase in prices of petroleum products

ISLAMABAD, Jun 30 (APP):Federal Minister for Finance and Revenue, Miftah Ismail here on Thursday justified the price-hike made by the government in the petroleum products, citing deviation from the agreement with the International Monetary Fund (IMF) by the Pakistan Tehreek-i-Insaf (PTI) government as one of the key reasons.

Addressing a press conference along with Minister of State for Petroleum Dr Musadik Malik, the minister said that the incumbent government had to honour commitments made with IMF by the previous regime, which had abandoned the agreement after a no-confidence motion was initiated against it.

He said, had the previous government continued the agreement, there would have been a gradual increase in the Petroleum Development Levy (PDL) and sales tax.

However, he added, since the PTI government broke a deal with IMF, the incumbent government had to start from the stage it was left. Consequently, it had to fix some PDL and sales tax.

He said, had the programme been continued, the petroleum levy should have been Rs70 tax each on diesel and petrol, however, the government imposed only Rs5 and Rs.10 on diesel and petrol respectively.

The minister said, the government had increased petrol prices by Rs 4.85 and imposed Rs1.0 PDL on it, hence increasing the prices by Rs.14.85 whereas there had been increase of Rs8.23 on diesel with a 5 per cent tax. Likewise, there has been only a 5 per cent increase each in the prices of kerosene and light diesel oil.

Accordingly, the prices of petrol have been increased from Rs233.89 per litre to Rs.248.74 per litre, high-speed diesel from Rs263.31 to Rs276.54 an increase of Rs13.23 per litre while Kerosene oil prices have been increased by Rs18.83 per litre, from Rs211.43 to Rs230.26 whereas the price of light diesel oil has been increased by Rs18.68 per litre, from Rs207.47 to Rs226.15.

“Increasing the prices, was not an easy decision but we had to do it in compulsion,” the minister added.

He said that there was a record tax collection by the Federal Board of Revenue, which had also exceeded the target of Rs61000 billion set by the previous government.

In addition, he said, the board government had paid all the processed duty Drawback of Local Taxes and Levies (DLTL) pending for the last three years. As per Prime Minister Shehbaz Sharif’s instructions, a few days ago we paid all processed DLTL claims pending for the last three years, he added.

He said, the board also paid all processed Faster, Sales Tax, Income Tax and Export Rebate claims that were due. Every single processed claim has been paid.

The minister said that with successful negotiations, the programme with IMF has reached a positive stage and the fund had recently issued a memorandum of economic and financial policies (MEFP).

He said, according to the policy, there are some prior conditions which included an increase in PDL and overcoming losses, which were recorded at Rs233 last year.

Minister of State for Petroleum Dr Musadik Malik said some issues were appearing before his ministry that showed the PTI government set ‘time bombs’ to destroy the national economy before facing the no-confidence motion against Imran Khan.

One of them [issues] was that the past government handed over the authority to determine the gas price to the Oil and Gas Regulatory Authority (OGRA), which would review the new price in the next 40 days under the law. “With this, the government has no power to review the gas price,” he added.

Dr Musadik said Prime Minister Shehbaz Sharif had ordered a commission on all such things, leaving negative impacts on the public, for investigation and fixing the responsibility.

He also delivered PM’s message on the occasion that no doubt Pakistan was passing through a difficult time but there was no option except taking tough decisions to avoid bankruptcy.

Had the incumbent government opted and continued with the PTI’s government policy, the country would have defaulted, he said, adding it would have been more hard to bear the burden of default and bankruptcy.

Dr Musadik said with timely and corrective measures, the government had remained successful in avoiding the looming threat of bankruptcy.

He said the prime minister was very concerned about the plight of the common man and always advised him to take special care of them, hinting that a new package of relief measures was being worked out to lessen the hardships of the needy.

He said the government was focusing on creating job opportunities and reviving the national economy, for which it looked into the possibility of importing industrial machinery from China that had become obsolete for it due to fast pace of development. This measure would help establish industrial units in the special economic zones of the China-Pakistan Economic Corridor (CPEC), under the government policy to encourage joint ventures.

He reiterated that the hard times would pass in four-five months, following which there would be the era of economic stability and subsequent prosperity.