Prices of POL products: Govt explains situation, tries to justify hike

ISLAMABAD: Pakistan Muslim League (N) leader Shahid Khaqan Abbasi Friday said the fuel subsidies were unsustainable and the public would have to bear the pain to take the country back on track where his party had left it in 2018.

In a joint press conference with State Minister for Energy (Petroleum Division), Dr Musaddiq Malik, Abbasi said that it was unfortunate that the government of the PML-N had to take such harsh economic decisions. “We can’t buy fuel at higher price and give on subsidised rate and no foreign country is doing this practice which is [a] disaster for the economy.”

He further said that the fuel subsidy had reached around Rs125 billion monthly, which the government was paying through additional loans. The federal government was running on Rs520 billion, defence expenditure was Rs1.7 trillion, the government paid subsidy of Rs250 billion in three months.

If the prices were not raised, the country would have drowned and the storm of inflation that people would have to face would be unimaginable.

Increasing petroleum prices necessary to stabilise economy: Musadik Malik

Dr Malik said the previous government of the PTI gave unjustified subsidies on petroleum products without any budgetary allocations and approval from the quarters concerned such as the Economic Coordination Committee (ECC) and the Federal Cabinet.

He termed the subsidies “landmines” installed by the PTI government before facing the no-confidence motion which put an estimated Rs700-800 billion additional burden on the national exchequer in three months, if taxes were included along fuel subsidy. The minister claimed around Rs528 billion expenses were incurred annually to run the affairs of the whole federal government.

Besides, Dr Malik said the PTI government, as a pre-condition, had signed an agreement with the IMF that they would increase the fuel prices and impose petroleum levy and sales tax also. Later, it violated sovereign commitment with the IMF, he added. The minister said the PTI did all this to push the country towards default and bankruptcy for political gains, and recalled Imran Khan’s recent statements about the country’s strategic assets and disintegration.

Responding to a question, he said there was no non-bidding MoU or agreement was signed with Russia for supply of fuel on cheaper rates.

Copyright Business Recorder, 2022