No change in oil prices after Eid: Revenue position improving: adviser
By Ihtasham ul Haque
ISLAMABAD, Nov 5: Oil prices will remain unchanged even beyond Eid because of the government's improved financial position, says Prime Minister's adviser on Finance Dr Salman Shah.
"We are not facing any dangerous situation to revise oil prices upward even after Eid. Therefore, the government would continue avoiding passing on the impact of increased international oil prices to our people," he said.
Talking to Dawn here on Friday, Dr Shah said that the government was receiving additional revenues to avoid raising oil prices and that "we are in no hurry to pass on the impact of the oil prices to consumers."
"We had earlier anticipated that there will be Rs80 billion fiscal deficit but due to improved revenue position, this deficit is likely to be around Rs30 billion during the current financial year," the advisor on finance said.
This reduced fiscal deficit, he said, provided enough cushion not to go for oil price increases as was largely witnessed in other countries. However, he said that oil prices would be adjusted at an appropriate rate as and when required so that common man did not suffer. "But so far, I can tell you there is no decision to enhance oil prices," he said.
Dr Shah said that Pakistan's economic fundamentals remained "very strong" despite sharp increase in the international oil prices during the past few months. "Pak Rupee is holding up and the inflation that increased during the past seven months has subdued on month-to-month basis and is now ranging from four to five percent".
Inflation, the advisor said, was likely to be between six to seven per cent at the end of the current financial year. "It is not correct to say that there is certain pressure on interest rates," he added.
In contrast to the State Bank's report for 2003-04, the advisor on finance claimed, that GDP growth target would exceed the 6.6 per cent target during 2004-05 because of better performance shown by exports, revenues and other sectors.
Dr Shah said that President Bush's victory would lead to extending more concessions, more market access for Pakistan and more business cooperation between the two countries.
"With the Republicans ruling the United States for four more years, we see further strengthening of relations between the two countries and more financial assistance for Pakistan," he said, adding that the US has already committed considerable assistance for the next three years.
Asked about the unprecedented escalation land prices, especially in bigger cities, Dr Shah said that the government has decided to deal with the issue by removing the artificial scarcity of land.
He said a decision has already been taken to open up five more residential sectors in Islamabad. "The provinces have been directed by the prime minister to unlock the artificial scarcity of land in bigger cities," he added.
He said that overseas Pakistanis were being provided additional incentives to invest in the country, particularly in the housing and construction industry. "They are being greatly facilitated by the Board of Investment (BoI) and their investment in Pakistan is increasing," he said.
