Tuesday, January 31, 2023

Govt likely to reverse its decision on petrol prices: sources

According to reliable sources, the PML-N government is likely to reconsider its decision to maintain the status quo on petrol prices in light of the country’s deteriorating economic circumstances and the disapproval of the International Monetary Fund (IMF) on the matter.

 “The government believes that subsidizing the populace with this massive multi-billion rupee package for cheap products is not a sustainable choice, and the International Monetary Fund, which is continuing its program in Islamabad, is dissatisfied with this decision.”

Following the rejection of the Oil and Gas Regulatory Authority (Ogra) recommendation to increase petroleum product prices on Friday, Prime Minister Shehbaz Sharif issued an order to maintain petroleum product prices unchanged for the next two weeks.

Meanwhile, Miftah Ismail, the prospective finance minister, rushed to Twitter to emphasize the government’s unwillingness to carry such a massive load and to suggest that the government may be forced to reverse its recently stated decision.

“The decision to maintain diesel and petrol subsidies, which was announced last night, was a difficult one, and it will have to be reconsidered,” Miftah stated.

‘The government was losing Rs21 per liter of fuel and Rs52 per liter of diesel,’ he claimed. The government will lose Rs250 crore [Rs2.5 billion] per day, or Rs3,600 crore [Rs36 billion] in two weeks, according to him, which is “much more than the cost of administering the entire civilian federal government, including the BISP/Ehsaas program in its entirety.”

It’s worth noting that Ismael went on to blame the previous government for the country’s economic mismanagement and mishandling, saying, “the PTI has tied our hands by actually committing in writing that not only will they recover the full cost of fuel, but they will also impose an additional Rs30 per liter levy and a 17 percent sales tax on those fuels.”

He further stated that, in accordance with the agreements made by the PTI government, the price of petrol and diesel should be Rs236/liter and Rs264/liter, respectively, in the coming months. But it is still unknown what the price of petroleum items will be when the review has been completed.

Read Also: Ogra proposed raising petrol prices 83.5 per liter

“Prime Minister Shehbaz Sharif is not in the mindset to inflict such exorbitant costs on the people, let alone high taxes.” Nonetheless, we cannot let our fiscal and external financial positions worsen further, resulting in our development partners withdrawing their assistance. “Difficult decisions must be made,” he explained.

He also stated that the increase in government spending and the increase in debt are the sources of the gasoline price subsidy.

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