Finance Minister Miftah Ismail on Tuesday defended the federal government’s decision to hike the price of petrol after “displeasure” expressed by PML-N supremo Nawaz Sharif and a strong coalition partner, the PPP.

The government raised on Monday night the price of petrol by Rs6.72 per litre for the next fortnight, taking it to 233.91 per litre, while the rate of diesel was also moved up to 244.44 per litre.

In his press conference later, the finance minister clarified that he had not stated that he would not be increasing the price of petroleum products.

“I had never said that I will not increase the price of petrol, I had stated that I will not be imposing taxes [on petroleum products] further,” Miftah said.

“I stand behind every decision of the government with full responsibility,” the finance minister said, noting that no economic decision was taken without his input.

Miftah said that he respected the PPP leadership and would address their reservations over the decision.

In his statement, PPP Co-chairman Asif Ali Zardari criticised the government for increasing the prices despite a massive appreciation in rupee value and a decline in international oil prices.

Expressing concern over the development, the former president said the PPP was a part of the government and supported it, but there must be consultations on such decisions.

“We are all here in this government to give relief to the people and that should be our top priority. We are with the prime minister and will meet him soon and talk about the economic team.”

The government’s decision invited a lot of criticism from the public. Citizens are of the view that the prices of petroleum products are on a downward slope all over the world but their prices are being increased in Pakistan.

As people vented out their views on the government’s decision, a user on Twitter tagged Maryam Nawaz and requested her to “speak to Mian Nawaz Sharif to take notice of the increase in the price of petrol.”

Replying to the user, Maryam tweeted: “Mian Sahib strongly opposed this decision. He even said that I cannot burden the people with one more penny.”She said her father stressed that he was not on board and that if the government was bound by some constraint, it should go ahead with the increase. Maryam said the PML-N supremo disowned the POL increase decision and left the meeting.

IMF PROGRAMME: Before discussing the petrol prices, Miftah had said that the dollar was in the government’s control after July 17, and it would gradually depreciate against the rupee.

He said that the International Monetary Fund’s (IMF) programme had “started”. Once the government sends the Letter of Intent (LoI) back to the IMF, its executive board will meet and give its approval for the dispersal.

He reiterated that the executive board was scheduled to meet later this month — August 29 — for considering Pakistan’s request to approve the seventh and eighth reviews and release a tranche of $1.17 billion under the Extended Fund Facility (EFF).

The finance minister also castigated the Imran Khan-led government for “moving away” from the agreement and conditions it had set with the IMF for the loan dispersal. 

“Imran Khan did not target us (the incoming government), but he targeted Pakistan’s economy,” Miftah said, indicating the previous regime’s decision to give petroleum subsidies.

Miftah added that it was always his belief that once the imports fall, the rupee will ultimately strengthen. “We imposed a ban on non-essential commodities.”

He slammed the previous government for leaving a circular debt of Rs1,500 billion. “You (the PTI) left a current account deficit which was more than Gen Pervez Musharraf’s tenure.”

PETROL PRICES: After coming under severe criticism, the finance minister explained how petrol prices are calculated.

Responding to senior journalist Hamid Mir on Twitter, Finance Minister Miftah Ismail said the government has not imposed any tax on petroleum products.

Miftah explained that the Oil and Gas Regulatory Authority (OGRA) takes the average of Platt prices, adds freight and premium paid by PSO on top of these prices, and multiplies that by the exchange rate.

In addition, he added, it also “trues up” the previous fortnight’s cost by taking into account the rupees paid by PSO at the actual exchange rate as opposed to the average used to estimate the previous fortnight’s cost.

The minister said that the government has not added any new tax or levy to the price.

“The price of petrol has gone up (and diesel has gone down) because the cost paid by PSO in the previous fortnight was more than the cost estimated by OGRA and also because the premium paid by PSO on petrol increased and premium paid on diesel remained unchanged.”

Clarifying his position, the minister said that he did not say that the price will not be increased.

Miftah said, “I am an easy target. Which is fine. But this price change only reflects the change in PSO costs and doesn’t have any new taxes.”

He said he did not mind people’s criticism because “I know I am sincere to my country and have saved it from default and working to the best of my ability.”


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