Why PML-N govt continues fuel subsidy without having sufficient funds?
Economists said that the PML-N government should clarify its position if the fuel subsidy is a barrier to reviving the national economy then why it is being continued so far.
ISLAMABAD: Questions arose over the continuity of the fuel subsidy by the Pakistan Muslim League Nawaz (PML-N) government after finance Minister Miftah Ismail alleged that the previous government of Pakistan Tehreek-e-Insaf (PTI) adopted a wrong policy for giving fuel subsidy without having sufficient funds and leaving nothing to the national treasury for the next government.
The PML-N government has once again decided to retain the prices of petroleum products, however, the rates of other fuel mediums including CNG and RLNG were hiked which will affect the industrial and export units besides increasing the power production cost.
Finance Minister Miftah Ismail kept blaming the previous PTI government for adopting wrong policies and leaving nothing to the national treasury but huge debts and multiple subsidies without having sufficient funds.
In a press conference yesterday, Miftah Ismail said the government was not raising petrol prices and a summary for that matter has been sent to Prime Minister Shahbaz Sharif for a swift decision.
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“Rising petrol prices cause a surge in food prices, which is the core of inflation and affects a common man directly,” he said while addressing the media in Press Information Department (PID).
He further said that the prime minister wanted to provide relief to already inflation-hit citizens.
However, the minister later tweeted from his official account that the decision taken to keep the fuel prices unchanged was for today. He also added that due to changing circumstances and international oil prices, they may have to revisit their decision soon, APP reported.
“Let me amplify what I just said in my presser. The government will not raise POL prices today. But due to changing circumstances and international oil prices, we may have to revisit our decision soon,” said the minister
Over the pending talks with the International Monetary Fund (IMF) which are due on May 18th, the minister informed that they would hold a review meeting with the International lender agency and would inform them about the decision taken in this regard (unchanged petrol prices).
The minister further said that the friend countries including Saudi Arabia had assured economic cooperation and talks were underway for the extension of the deposited period.
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He said the Saudis had promised to extend the term of deposits from December 2022 and also agreed to negotiate an increase in deposits.
Miftah regretted that due to the wrong policies of the previous government of Pakistan Tehreek-e-Insaf, there was an imbalance between imports and exports.
Taking on the former finance minister Shaukat Tarin, he said, the latter agreed with the IMF to end subsidy on the fuel prices phase-wise.
Tarin’s response to Ismail
Former finance minister Shaukat Tarin has criticised the Pakistan Muslim League Nawaz (PML-N) government for having no policy and being completely confused in every decision.
Shaukat Tarin told ARY News that the PTI government had never promised the International Monetary Fund (IMF) to end subsidy as a comprehensive plan was presented to arrange the required funds.
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Tarin said that the present government is panicked after failing to cope with the economic challenges.
“Our government had provided a subsidy for giving relief to the nation. Prior to approving subsidy, the PTI government had arranged the required funds.”
“This [PML-N] government is bearing pressure of IMF for not receiving another tranche of loan money before ending subsidies. The country’s market is facing a situation of uncertainty. They are not sitting on the opposition benches now and they should now show to handle these issues.”
The former finance minister said that the PTI government had never asked IMF to end subsidy as the global finance institution was apprised about the source of funds. “PML-N government’s decision will increase the pressure on the rupee in the coming days besides hiking the interest rate. I had told them from where to get the required funds.”
Economists said that the PML-N government should clarify its position if the fuel subsidy is a barrier to reviving the national economy then why it is being continued so far. The present government should tell the reasons for the continuation of the fuel subsidy if it is not benefiting the country on a long-term basis and the previous PTI government did not leave sufficient funds.
