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ISLAMABAD: Finance Minister Miftah Ismail Tuesday said he takes ownership of all the difficult decisions taken by the present government including the latest increase in petroleum prices, and stated there would be Rs10 per litre increase in petroleum levy from 1st September as agreed with the International Monetary Fund (IMF).

Addressing a news conference, the finance minister clarified that he never stated about not increasing petroleum prices, all he said was that no tax or levy would be imposed and added that petroleum prices are calculated by the Oil and Gas Regulatory Authority (OGRA) by taking the average of Platt prices, adding freight and premium paid by the PSO on top of these prices, this is multiplied by the exchange rate.

He claimed that petrol in India was being sold at Rs303 per litre and in Bangladesh at Rs308 per litre even though the foreign exchange reserves of both countries would be much greater compared to Pakistan.

He said that the government would honour the commitment made with regard to an increase in petroleum levy and he would be sending LOI to the IMF by Tuesday evening after making minor changes specific to the State Bank of Pakistan (SBP) and the Finance Division. He said that Pakistan has completed all the requirements and the board meeting will be held on 29th August and will approve the disbursement of the installment.

He said that the impact of the government’s decision to limit imports is visible on the exchange rate and the dollar which went out of control after July 17 has now been brought under control.

Extended Fund Facility: Pakistan receives Letter of Intent from IMF

He said from August 1-15, the Pakistan rupee was the strongest currency and the world’s fastest market was Pakistan’s stock market. He said exchange rate strength should reflect the strength of the economy and economic management becomes difficult with the current account deficit when there is a current account deficit of $17.5 billion as a result of $80 billion imports, $31.7 billion exports and $31 billion remittances.

The minister also came down hard on the previous government and stated that it added Rs20 trillion debt without undertaking any development project.

He also recounted the infrastructure development, power projects, and highways constructed by the Pakistan Muslim League (N) government during the last tenure while the previous government has not only left over $17 billion current account deficit, added Rs1,500 billion to the circular debt in the power sector, and Rs1,400 billion in the gas sector. He said that not a single LNG terminal was installed during the last four years of the previous government.

He said the LNG agreement made with Qatar is providing benefits to the country and the previous government did not make any long-term agreements. He said that $21 billion debt is required to be paid and how real freedom is possible as was being talked about by the former prime minister when there is $17.5 billion current account deficit and the country would be required to make payment of debt.

He said that the current account deficit was not left alone by the Pakistan Tehreek-e-Insaf instead all the governments are to be blamed and the highest current account deficit was left by Pervez Musharraf in 2007.

He said that there is a need to strike a balance to finance the import bill or trade deficit through exports and remittance and this is the only way forward for self-reliance. He deplored that the country was importing wheat despite being an agricultural country. He said that the present government has imposed a ban on non-essential goods including imported vehicles, air conditioners and refrigerators.

The finance minister in response to a question about the imposition of additional taxes, said that Rs42 billion tax collection was estimated through a fixed tax from electricity bills of trade, however, this tax has been deferred for a year. He said this shortfall along with others would have to be bridged through some means.

Copyright Business Recorder, 2022

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