Last Updated on: 14th July 2023, 10:34 am
Federal Govt Can’t Afford To Subsidize Petroleum Products, Says Miftah Ismail
Finance Minister Miftah Ismail said Sunday that the Pakistani government could not provide oil subsidies due to the conditions set for the country by the International Monetary Fund (IMF).
Some news media spokesperson asked the finance minister if the government plans to cut gasoline prices in the country from 15th August due to the slump in the international market and the strengthening of the rupee against the dollar.
In response, Ismail said the country had made arrangements to borrow 4 billion US dollars from friendly countries in accordance with IMF terms. He added that the Treasury will no longer levy taxes and duties on petroleum products, but reiterated that the government can no longer absorb losses by granting subsidies.
“The IMF has made it a condition that we first seek 4 billion USD in loans elsewhere before seeking help from the global lender,” he said, adding that the country managed to get the needed credit from to obtain some friendly countries.
“We will sign the MoU and send it to the IMF tomorrow,” he told the host of the document, which Pakistan received this week.
In response to another question, the Finance Minister said all political parties should sit down and hold talks on the “Economic Charter”.
Speaking on levying a flat tax on shops, he said that “he made a mistake in imposing a 3,000 rupee tax on small shops. Rs 3,000”.
In response to PTI President Imran Khan’s comparison between Pakistan’s economy and India’s, Ismail said the neighboring state had been building institutes while Pakistanis played Gillidanda since the 1950s.
“Here we have fake factories to make teachers, we have paid little attention to the country’s education sector or its growing population, but [the PTI] is there to brandish the slogans of true freedom. The same party left a deficit of 48 billion USD,” he said.
“No More Bad Days”
Last week, Ismail said the country was on “the right track” but warned the nation of “worse days ahead”.
“We’re on the right track, but obviously we could see bad days. However, we are on the right track and if we control our imports for three months, we can increase our exports in various ways,” he said during an event on the Pakistan Stock Exchange (PSX).
Pakistan reached a staff-level deal with the IMF last month, followed by months of deeply unpopular belt-buckling by the government that took power in April, effectively scrapping fuel, oil, and electricity subsidies and introducing new measures to broaden the tax base.
Also Read: Miftah Ismail Warns of Further Increases in Petrol Prices
The new administration has cut a number of subsidies to meet demands from global financial institutions, but risks incurring the wrath of an electorate already struggling to bear the brunt of double-digit inflation.
After the staff-level agreement and tough decisions, IMF Representative for Pakistan Esther Pérez Ruiz said earlier this week that the country had met the final condition – the increase in the PDL (Petroleum Development Tax) – for the seventh and final week. eighth combined revision.
Former Prime Minister Imran Khan signed an initial 6 Billion USD bailout in 2019.
Also Read: Miftah Ismail Summarized All Measures in The Final Budget 2022 Speech