Finance Minister Miftah Ismail Thursday said the government would strive to maintain the current petrol prices, adding that if rates were increased, no new taxes would be imposed.
Talking to the media in Karachi, the minister harshly criticised former prime minister Imran Khan’s polices stating that the terms of the previous International Monetary Fund (IMF) agreement stipulated a price of Rs245 per liter of petrol.
Miftah claimed that at the current price of petrol, the treasury stands to incur a loss of roughly Rs102 billion monthly if prices are not raised by May. He added that the government has never sold petrol at a loss. However, he assured the media that the price of petrol will be subsidized “as much as possible.”
“Pakistan is losing Rs70 billion on diesel alone and the monthly expenditure of the government is Rs45 billion,” the minister stated adding that the government would incur a loss of Rs102bn on fuel alone “equal to the cost of running two and a quarter governments, which cannot happen.”
The finance minister revealed that the government had earlier borrowed from the market, but could no longer do so due to the State Bank of Pakistan’s (SBP) new laws.
“If we do that, the government will have to pay interest. When the State Bank lends to us, we are printing money which drives inflation,” Miftah explained.
Minister Miftah also stated that borrowing from private banks was not a viable solution since it would increase interest rates.
Currently, the finance minister has assured that the price of petroleum products will not increase in the short term, owing to the pressure it creates on the working class.
On April 26, Miftah Ismail announced that the government will devise a policy to increase petroleum prices, adding that the “elite class having big vehicles could not be given subsidy; however, those using less petrol such as motorcyclists will be given relief”.
