• Finance minister says all commitments to IMF, including increase in PDL, to be implemented at all costs
• Skips question on Maryam’s tweet describing Nawaz’s walkout from huddle on fuel prices
• Zardari says will meet PM soon to ‘talk about economic team’
ISLAMABAD/LAHORE: Despite criticism from various quarters over the unexpected increase in fuel prices on Monday, Finance Minister Miftah Ismail stood by his stance that the government has not imposed any new taxes on petroleum products.
While this decision has brought to the fore differences within not just the ruling coalition, but also the PML-N, the minister categorically stated the petroleum development levy (PDL) increase on oil products, as committed with the International Monetary Fund (IMF), will be implemented at all costs.
The minister began his day by clarifying a journalist’s concerns that the fuel price revision did not include any new taxes, saying: “The increase or decrease in prices is according to the purchasing by Pakistan State Oil. The Oil and Gas Regulatory Authority takes the average Platt prices, adds freight and the premium paid by PSO on top of these prices, and multiplies that by the exchange rate.”
Later, addressing a news conference after a cabinet meeting on Tuesday, he asserted that everything committed to the IMF, including further increase in PDL on oil products on Aug 31, would be implemented at all costs, adding the PDL will keep increasing until it reaches Rs50 per litre. From now onwards, the top priority is to control inflation, he added.
He said he would add the PDL amount committed while forwarding a summary to the prime minister for oil price adjustment due on Aug 31 or afterwards because this could not be notified without the premier’s consent. “Even yesterday, the POL price adjustment was announced after the prime minister signed it,” he maintained.
The minister also confirmed he was part of a meeting wherein former prime minister Nawaz Sharif purportedly opposed the increase in oil prices and left the huddle in protest. He, however, said he would not comment further on that.
The issue came up when a journalist brought up a tweet by PML-N vice president Maryam Nawaz where she claimed: “Mian Sahib strongly opposed the decision and said he could not add burden of even a penny on the people and if the government had any compulsion he was not part of the decision and left the meeting”.
A major ally of the PML-N in the ruling coalition, PPP leader Asif Zardari also voiced his opposition over the issue, and complained of not being taken on board. “The PPP is a part of the federal government and supports it. It should consult us on such important decisions,” the former president said in a statement.
He reminded the PML-N-led government that the PPP and other coalition parties had joined the government to provide relief to the people, which should be their top priority. “We are with the prime minister, and I will meet him soon and talk to him about his economic team,” Zardari said.
The two major leaders’ outright rejection to the Shehbaz government’s decision to increase petrol prices has raised many questions -- whether both the big guns, especially the PM’s brother Nawaz, were consulted or the duo is politically bound to castigate its own government to keep their respective vote banks intact.
A day earlier, another important ally of the federal government, the Jamiat Ulema-i-Islam-Fazl, had castigated the Shehbaz administration for organising a musical event on Aug 14.
A senior PML-N leader from Punjab told Dawn PM Sharif did not take any important decision without consulting his elder brother.
“Mr Zardari is also taken on board on matters, especially political, but not administrative ones like petroleum prices,” he said.
Talking about the reaction of Nawaz and his daughter over the fuel prices, the leader said: “The father and daughter’s statement should be seen in a political context. The masses resent the government’s decision, especially when in the international market the rates are dipping. So, the elder Sharif and Zardari are trying to tell people that they are with them over this issue.”
At the press conference, Minister Ismail said he respected Mr Zardari’s displeasure over the petrol price hike and would brief him about the situation while he had already had a meeting with Foreign Minister Bilawal Bhutto-Zardari.
He also elaborated various components of petroleum pricing already in vogue, including calculations by the oil and gas regulator, summary prepared by the Petroleum Division and taxation proposed by the Finance Ministry for the PM’s approval. He said the latest pricing was impacted by exchange rate loss and increase in the premium paid by PSO to secure various products that had increased from $8.5 per tonne to $17.
He conceded that the exchange rate had gone out of control after July 17 and reached Rs239 per dollar, adding he and his cabinet colleagues practically engaged with foreign banks and governments to facilitate the opening and honoring of letters of credit, even for oil imports.
The minister said the IMF had provided to Pakistan a draft letter of intent (LOI) on the agreement reached over the bailout package, and minor changes pointed out by the state bank and his ministry had been made by the IMF after a series of meetings. A final LOI was received on Tuesday, to be signed and shared with the Fund the same day. The IMF executive board was expected to approve the package in the last week of the month to be immediately followed by funds disbursement.
Published in Dawn, August 17th, 2022