Fuel prices: Miftah says 'no chance' of immediate hike but won't rule out eventual subsidy reversal

Published April 25, 2022
Finance Minister Miftah Ismail speaks during a Geo News show on Monday. — Screengrab via Geo News
Finance Minister Miftah Ismail speaks during a Geo News show on Monday. — Screengrab via Geo News

Finance Minister Miftah Ismail on Monday said there was "no chance" of an immediate hike in petrol prices in the next few days but did not rule out the possibility revising prices on or after May 1, saying that even if the latter route was taken the government will have to deliberate upon various factors before giving the go-ahead.

Speaking to senior journalist Hamid Mir on his Geo News show, Ismail said the public should not worry about any impending price hike in the next three to four days. "If there is a surge in fuel prices, it will be done after consideration of multiple factors including the summary submitted by the Ogra."

Miftah's statement comes a day after he, during his Washington visit, told US think tank Atlantic Council that the government will have to increase the price of petroleum products to get Pakistan’s economy back on track and to revive the stalled bailout programme with the IMF.

The IMF, in 2019, approved a $6 billion loan over three years for Pakistan but disbursement has been slowed by concerns about the pace of reforms.

In the interview today, Miftah said Prime Minister Shehbaz Sharif would also question him about measures being taken to insulate the poor when he eventually does got to him recommending a petrol price hike. "Thus, I also have to make that plan, which I haven't yet."

"We will have to review subsidies given to the rich segment in order to ease inflationary pressure on the poor," the minister added.

'No plan to reverse SBP legislation'

When asked whether the legislation on SBP autonomy will be reversed as the PML-N had strongly opposed it while in opposition, Ismail said he still believed there was still much to be reviewed on the matter.

"However, I am not allowed to be distracted at the moment. I am totally focused on the IMF programme. Currently, the government has no plan to make changes to the SBP autonomy that might affect our ties with the IMF."

The SBP Amendment Bill, 2021, was approved by the Senate on Jan 28 this year amid strong protest from the opposition parties, primarily the PPP and the PML-N.

The bill promises complete autonomy to the central bank and places a complete restriction on the government’s borrowing from the central bank. However, the government now can borrow at a market rate from commercial banks, which will benefit private banks owned by business elites, according to the opposition.

The passage of the bill was one of the conditions set by the IMF for the release of $1 billion to the country.

In response to another question, the minister said the government had no plans to amend any law at least for a year.

He vowed the government would take measures for the facilitation of the poor in days to come.

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